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According to official data, released from the Chinese statistics bureau in Beijing, gross domestic product grew by 6.8% in the 4th quarter of 2008, a sharp decline from the 9% average gain realized in the first three quarters of 2008.
Goldman Sachs, Thompson Reuters Data Stream PBOC
- China: Total Loans 2008
- China: Industrial Production 2006-08
- China: Real GDP 2000-2009
Japan saw its exports decline 35% in December, the biggest drop since 1980.
South Korea released official figures, stating its economy has contracted by 5.6% in the 4th quarter of 2008.
Singapore has said it will tap into its reserves from the first time ever, with the president giving his “in-principle approval” to fund a $4.9 billion relief package.
News is not all that good, to say the least. Check out the press from a few major news sources.China's economy slows sharply, worse yet to come – ReutersChina's economic growth slows – BBCChina's GDP grows by seven-year low of 9% in 2008 - XinhuaChina's GDP growth slowed to 6.8% in fourth quarter (update 2) – BloombergS'pore to tap reserves – The Straight TimesSouth Korea braces for first recession in 11 years – The Business Times Malaysia Japan's exports plunge as recession deepens – AP via Yahoo NewsMiners to be hit as China's slowdown worsens – The Australian
1) Latin Business Chronicle: Asia-Latin Trade Boom - by Joachim Bamrud
With the U.S. economy continuing to show weak results, Latin America is increasingly betting on Asia. Latin American exporters have found eager markets in countries like China, Japan and India, while Asian companies, in turn, are boosting their exports to Latin America.
"The growth of Asia will drive the business with Latin America," says R. Viswanathan, India's ambassador to Argentina, Uruguay and Paraguay and widely considered India's leading expert on Latin America. “Both governments and business have started looking at the potential for complementary cooperation between the two regions....
"Trade will grow despite short-term commodity price fluctuations because demand in Asia remains high for Latin America’s resources," says Michael Diaz, managing partner at U.S.-based law firm Diaz Reus, which serves many clients involved in Asian-Latin American business....
*** You must be a full member of the Latin Business Chronicle to access the full article. Click here for the free expert
2) Gazprom, Total to invest $45 billion in new exploration in Bolivia reports Business News Americas Russian oil company Gazprom and French oil major Total (NYSE: TOT) have signed an MOU with Bolivia's state hydrocarbons company YPFB to invest US$4.5bn in a new natural gas project in Bolivia, a YPFB spokesperson told BNamericas, confirming local press reports.
The three companies will develop the project in the southeast of Bolivia, where Total is already producing natural gas from six wells, the spokesperson said.
Production from the project could reach 26Mm3/d.
Click here to access the full article from Business News Americas
3) Garcia and Lulu discuss increasing bi-lateral trade and investment between Peru and Brazil reports Andina News
Sao Paulo, Sep. 18 (ANDINA).- President Alan García held Thursday evening a meeting with his Brazilian counterpart, Luiz Inácio Lula da Silva, to discuss about bilateral relations and the possibility to attract more investments to Peru....
President Alan Garcia and his Brazilian counterpart
Luiz Inacio da Silva in San Paulo. Photo Sepres
García said Thursday morning that during the meeting he will propose to his Brazilian counterpart “a reinforced bilateral agreement”, a kind of Free Trade Agreement (FTA), which will include speeding up a tariff exemption process....
Click here to access the full story in english from Andina News
I must apologize for the lack of good quality updates these past few weeks. New responsibilities and traveling have kept me busy and left me little time to be a news hound to the extent I have been this past year or so.
As a result I've decided to start a new routine with this website. I will from this point forth make updates 2-4 times a week. The new style and form of these updates will consist of various links to news worthy stories from the previous days concerning commodities, south-south cooperation, international finanance, political developments (focusing on China and South America) and other relevant events from online media/ scholarly writings. Each post will also include my own personal analysis of the news articles and or about the underlying topic from their content.
I also wanted to mention that as of September 15th I will be moving out East. I begin a short trip to Singapore and Japan for 2 weeks on the 15th and will eventually be settling up shop in China in early October. I look forward to providing the best analysis of this rising, commodity hungry super-power from the ground up to all readers.
Of course you may begin to notice less links to places such as BBC, CNN (whom I don't think I've really ever used as a source here since I despise them by and large), and more links to Chinese media and other media sources that use content from AP, Reuters or Bloomberg but don't rise the same red flag some sites illicit when trying to be accessed from China. (I may even end up deleting this post before I get there). China is a great country, and despite my love of fast and free internet one must respect the rules of ones host-- that is the sensitive barriers the country has in place to prevent "un-desirable" content from being published or accessed on the web.
Thanks and apologies to my daily readers that I will no longer be able to provide "breaking news" updates. I do promise to up the quality of my analysis and keep you posted with good news you won't hear about as you watch the mind-numbing media of today's world (CNN, Fox News I mean you).
Moscow: The uranium industry’s worst year is about to collide with a nuclear construction programe in India and China that rivals the ones undertaken during the oil crisis of the 1970s.
The result is likely to be a 58% rebound in uranium to $90 (Rs3,870) a pound from $57 now, according to Goldman Sachs JBWere Pty. Ltd and the Rio Tinto group, the third biggest mining company. Uranium plunged 57% in the past year as an earthquake damaged a Japanese plant that is the world’s largest and faults shut down reactors in the UK and Germany.
Plans for India and China to end electricity shortages will ripple from Canada to the Australian outback and the flatlands of Kazakhstan, the primary sources of uranium. India will start three reactors this year, with another six due next year in India, China, Russia, Canada and Japan. Uranium demand worldwide will rise as fast as oil this year, or 0.8%, Deutsche Bank AG forecasts.
Scarce commodity: The Hamaoka nuclear power station in Japan. Uranium plunged 57% in the past year
as an earthquake damaged another plant in Japan and faults shut down reactors in the UK and Germany.
(Photo: Robert Gilhooly/Bloomberg)
Click here to access the full article from Livemint News.
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In the old days, I remember people used to consider weekends the time where you could “catch up” with news and developments from the past week, and get ready for the one coming up. These days it's a bit more difficult as markets around the world open and close when you wake up every morning and when you go to sleep—with Saturday into Sunday being the exception when global clocks no matter where you may be geographically, are ticking in “weekend” status.
A couple interesting stories caught my attention this morning in my own “catch up.”
First i'd like to talk about Argentina... one of the primary South American countries China has a strategic interest in developing relations with, both political and economic. The country is well endowed with energy related commodities ranging from hydro-carbons, hydro-power and natural gas. The country has a substantial supply of many metals, such as tin, zinc, silver and gold. Last, and most important right now for China and many countries in the world is their incredible capacity and un-tapped capacity as well in food production.
Argentina, at one point in time was known as the "break basket" of South America for a reason, people compared Las Pampas in a Argentina and the vast lush land with other similar areas such as the Midwestern United States or the Ukraine in Europe. With the South American countries of Brazil, Uruguay and Paraguay-- Argentina is well poised (as the rest are), to benefit from rising food prices around the world. Not only because they can sell them at higher prices, but because if domestic capacity can be increased the countries can help themselves fight both rising food prices and inflation in general.
It would be a nice thing to see countries which are no where near their productive capacities emerge and help alleviate what is in reality a global shortage of everything (food, metals and energy). Food prices, especially of particular products like Soy or red meat, are not exactly controlled in a cartel like oil is with OPEC, or related to big petroleum companies (state or private) which can affect prices with far greater ease, and also increase output in a more synchronized fashion.
This is why it is discouraging to learn that Argentina is unable to fulfill its beef export quotas to the EU, as described in full detail in Mercopress's article from Friday, June 13. Anyone whose tried Argentinian steak knows it is the best in the world (ok... maybe i'm bias), and they used to have a over-supply of it, that I recall as a child it being very difficult to find actual Argentinian meat in the United States due to many US beef producers being worried of competing with Argentinian producers and import quotas or some form the US has on Argentinian beef. For the full article click here to access it from Mercopress.
The Kichners, called by some the King and Queen of Argentina now, are keeping price controls in place on a array of goods ranging from gas to food. The historically cranky and rather powerful Argentinian unions, "strike again," you might say. Just reflecting for a moment from their recent crisis... Unions in Argentina can in part be held accountable for being too powerful and fickle back in the early 2000's when the economy crashed. Protests prevented the government from abandoning the dollar peg, rising prices, firing workers, decreasing salaries and spending less. This was all necessary due to the fact Argentinian workers and goods/services had to sell on the global market priced in US dollars. As the dollar rose in the 90's, when the peg was in place, it helped quell inflation and allow Argentina to borrow in dollars from international lenders, however with no exit strategy and internal protest the economy crumbled. Debt could not be repaid, the Argentinian goods/services and workforce where not efficient enough and did not modernize enough to support the economy having such a strong currency, and thus I personally feel they where a large part of the problem. Regardless, for the peg to have worked it would have been very difficult, but the fall out would not have been as severe if the work force could have modernized further to become more productive.
It seems once again the Argentinian government seems to be on the same path of self-destruction, which could be cushioned in part by the commodity bull market, but even this is under threat thanks to unions once again. Cordoba, which is Argentina's 2nd largest and influential province , and 2nd in GDP next to the capital of Buenos Aires, has reported, protests from the Agricultural sector are now disrupting the metal sector in their regions, preventing production and exports. Additionally, the transport sector began to protest recently due to global fuel prices rising to record highs, furthering the problem. Reported on Business News Americas (click here for full article) the unions and workers of the agricultural sector remain in protest due to government taxes on their exports.
Argentina military police clash with farmers who staged a road blockade to protest a controversial export tax.
Photo provided/ accessed from CNN news story
http://www.cnn.com/2008/WORLD/americas/06/14/argentina.violence/index.html
The government like those of other South American countries is trying to take advantage of record high prices, and behind the scenes also raise the state coffers a bit which have decreased as of recent. In reality, the agricultural sector could still probably find buyers with the new export duties, considering global prices... as usual though, Argentinians have become used to the current system and lives they live, and would probably prefer almost universally, to take advantage of higher prices directly by charging higher prices themselves, as opposed to having the government spend the new tax revenue. Latin American governments have a historic tendency to spend badly, the people know this and feel it is unfair, as they should.
However, the economy as a whole can not be expected to maintain the healthy growth rates of recent if it is not producing, working and functioning. Just as Latin America missed out on the energy booms in the 70's from not developing their energy sectors in the 50's and 60's, here too, if Argentina can not settle these problems, the country will miss out being able to benefit from both record high metal and food prices. Energy wise, the country can not even produce enough for its own demand, export of natural gas or petroleum probably will not be possible... so the country SHOULD concentrate on where it can generate income (metals and agriculture), so far its failing and with inflation over 10%, and the central bankers constantly re-arranging CPI and PDI baskets in which to gauge inflation, it is probably a great deal higher. Argentina needs to get its act together, out of all the South American countries it seemed very well positioned after their rebound in 2004-2006 to take the stage as a leader in the continent, instead it is retreating to its roots of populism, spending, price controls, inflation, and protest. I personally hope it can ride this storm out, but at the moment I continue to loose faith.
A business executive from Cordoba, Argentina explained the problem to BA Americas reporter; "The conflict with the agro sector has been going on for more than three months and has slowed investments in the metallurgical sector. Now add to that the protests being carried out by the transport sector, which are causing us to not receive the supplies we need for our processes," the executive said.
-- Source Business News America's article by Harvey Beltran
A unrelated side note...
A interesting book discussing what will come of China-India-Japanese cooperation in Asia. The three, never before friendly power houses of Asia are warming up to one another, but, whether or not it's only “skin deep,” as Bill Emmott, author of the book and former editor of the Economist writes, time will tell. The book from reviews from the Asia Times Online say it does a pretty decent job exploring many dynamics of international relations of these 3 countries. The book is more about inter-state rivalry, which is more along the lines of foreign policy. This site does pay attention to FP, but as readers know, it is simply not the focus of chinasouthamerica.blogspot.com.
Click here if you'd like to learn more about this publication and read the full book review from Asia Times Online.
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