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Reading tea leaves for signs of China's recovery

David Dollar's picture

Click chart to see larger version.
What to make of it when, within a few hours last week, the statistical bureau depressed us with a 26% decline in exports for February and then elated us with a 27% increase in urban fixed asset investment? These two figures capture nicely the struggle that is going on within the Chinese economy.

We launched our China Quarterly report today with our take on how to reconcile the conflicting data. Clearly, the global economy is in very poor shape. Global GDP declined at an annualized rate of 5% in the fourth quarter of 2008, and global industrial production declined at a 20% rate. These are shocking numbers that those of us born after the 1930s have never seen. Naturally this has had a large effect on China, which is an open, export-oriented economy. China's seasonally adjusted monthly exports peaked at around $120 billion last fall, and then fell off a cliff – dropping by about one-third (see chart).

Defying gravity? Chinese banks respond to stimulus, increase lending

James Seward's picture

InstabilityThere has been a noticeable lack of entries to the East Asia & Pacific finance blog recently, but unfortunately I've been otherwise occupied on a trip in Beijing. It has certainly been a busy time here in China's capital with the National People's Congress (NPC) going on. However, I haven't seen much of it other than the long traffic jams caused by the road closures. The NPC meetings covered some of the domestic economic stimulus plans, but it has not dealt directly with financial sector issues. Maybe it did not need to since the banks here have already responded to the stimulus.

A recent China Daily report had a great graphic that showed the recent boom in lending by the banking sector, which corresponds very nicely to the announcement of the original economic stimulus plan. As I highlighted in a prior blog post, the $586 billion economic stimulus plan announced in November was only 30 percent funded from the central government, and the expectation was that much of the rest was to come from state-owned banks. Well, it seems they have delivered with gusto!

Wen Jiabao reaches out to China's online community in first live chat

James I Davison's picture

Despite concerns of the Chinese government about its recently recognized Internet Addiction Disorder, there is little doubt that the web is now part of life for the country's 298 million netizens, as well as an evident piece of the government's communications strategy.

Grazing in a nature reserve the only choice for herders in Xinjiang Uighur region of China

Tony Whitten's picture

Just before Christmas my colleagues Judith Schleicher and Zeng Jun joined me on a visit to Lake Aibi in order to visit Kokobasto, a Kazakh nationality village situated north of the lake and within the Lake Aibi Nature Reserve in China's far north-western Xinjiang Uighur Autonomous Region. When I last visited the village (as mentioned briefly in my rant about goats and an accompanying YouTube film), I was told that herders from the high summer pastures to the north came down to Kokobasto during the winter along with their livestock.

I had wanted to meet them and discuss herding practices, even though it was a particularly cold and bleak time of year.  In fact those shifting herders no longer come to Kokobasto, and my following YouTube film documents some of the meetings we had with a selection of the 250 inhabitants who live permanently in the village.

The villagers feel part of Tuoli County, Tacheng Prefecture, to the north, and they have their livestock grazing permit from there. But they actually live and herd their livestock in the nature reserve, which lies wholly within Jinghe County, Bortala Prefecture.

Discovering two new cave-dwelling species before lunch

Tony Whitten's picture

I'm in the north of Guangxi in southern China feeling privileged to be working in such a dramatic karst limestone landscape and part of another great project team. The conical and vertical towers of limestone jut out of the flat agricultural land, sometimes in single sentinels and sometimes in great families of jagged, pointed peaks, no two alike. At Mulun National Nature Reserve which abuts the Maolan World Heritage Site in Guizhou, there is nothing but these towers, and this is one of the sites getting detailed attention within our Integrated Forestry and Conservation Development Project. One sub-component of the project is directed at cave biodiversity. In that regard, we recently made some remarkable discoveries at Mulun.

As I have mentioned in an earlier blog post, cave biodiversity gets appallingly little attention relative to its significance. It is surely the most unknown of the terrestrial ecosystems, and it makes me drool to be close to places for which so little biological information is available.

Regional roundup: Finance in East Asia – Feb. 11

James Seward's picture

Well, the bad news continues across the East Asia and Pacific region. The Financial Times just ran a long article on the "speed and ferocity of the region's economic downturn." The piece highlighted that the fast downturn was a result of Asia's over-reliance on export-led growth over the past decade. This follows the IMF's slashed growth forecasts for the large East Asian economies. It projected only 5.5 percent growth across developing Asia for 2009, which sounds great for most economies these days, but it is way off of the 7.8 percent posted last year.

The IMF is expecting only 6.7 percent growth in China, which is 1.8 percent less than what they forecast only in October. This contrasts sharply with the view of the World Bank's Chief Economist, Justin Lin, who just two weeks ago said he thought China could achieve the target rate of growth – 8 percent – this year because of fiscal stimulus spending.

Is 'brain drain' a thing of the past?

James I Davison's picture

Lately, I’ve noticed several bloggers and news sites have picked up on an interesting trend migration trend that many have dubbed "reverse brain drain" – the return of skilled immigrants to their home countries. With rising unemployment and an often-difficult U.S. immigration process, the notion of looking back at home for work has reportedly appealed to foreign nationals working in the United States for technology, finance and other industries.

World Bank economist Sonia Plaza writes on the People Move blog about the shift in terminology over the years caused by new trends.

Some optimism during gloomy mood of Davos 2009

James I Davison's picture

Chinese Premier Wen Jiabao as optimistically predicted his country’s growth in 2009. Image credit: worldeconomicforum at Flickr under a Creative Commons license.
I've seen quite a few stories this week about the World Economic Forum, which is entering its last two days in Davos, Switzerland. Not surprisingly, accounts coming out of the annual meeting have reflected the gloomy state of a global economy in the midst of financial crisis. Seems the event's past reputation of being a party for wealthy people and celebrities has been replaced with politicians, average government workers and others discussing – as the 2009 event has been dubbed – "Shaping the Post-Crisis World."

A story that stuck out at me came from the New York Times, which quoted Wen Jiabao, the Chinese premier, as optimistically predicting the country’s growth in 2009 at 8 percent. That’s pretty optimistic compared to many other economist predictions – some as low as 4 percent or less for the year.


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