India has the potential to overtake China in terms of growth rate in the coming years, provided it implements reforms in a big way, noted economist Nourel Roubini said today.
The improvement in India’s growth rate has so far mostly been because of ‘luck’ even as the country is more safe from global shocks, he added.
Reiterating his earlier prediction that the Indian tortoise will take over Chinese hare, Roubini, however, said India will have to wait longer to match it in terms of overall size of GDP.
“I do believe (in that prediction) because China is slowing down and next year it may be below 6 per cent, from about 7 per cent now.
“At the same time I don’t see a reason why India cannot grow faster. They can go to 7 per cent soon and even more than that. In the next decade there is no reason why India should not grow at a rate more than China.>> Read More
Peeved over International Monetary Fund (IMF)’s forecast that India’s growth rate would surpass that of China by 2016, a state-run daily here today said having overshadowed by the Communist giant for long, India is seeking evidence to show that “it is not inferior to China”.
“It’s different in India. Long overshadowed by China, it is keen to become the best in some aspects. It is in dire need of evidence to show that it is not inferior to China,” state- run Global Times said in its editorial, a day after IMF forecast that Chinese economy would continue to slowdown even next year and would fall behind India’s growth rate.
Besides posting its lowest growth of 7.4 per cent last year in two decades, during which China became the world’s second largest economy, it also missed the official target of 7.5 per cent for the first time in recent years, fuelling concerns about a prolonged slowdown.>> Read More
Albert Edwards admits that his “über bear” reputation is well deserved, at least with respect to equities, an asset class he has dismissed for the last 10 years. His bearishness has not abated, and for the coming year, he fears that “deflation will overwhelm the west.”
Markets, he said, will riot.
Edwards is the chief global strategist for Société Générale and he spoke at that firm’s annual global strategy conference in London on January 13. Andrew Lathrope, the firm’s head of global quantitative strategy, and Dr. Marc Faber, the publisher of the Gloom Boom & Doom Report, also spoke.
Global markets face three risks, according to Edwards: bearishness in the U.S. government bond market, a flawed confidence that the U.S. is in a self-sustaining recovery and undue faith in the relationship between quantitative easing (QE) and the equity markets.
Deflation is the main threat, though, according to Edwards. “This is the year the markets really panic about deflation. You haven’t had that panic yet.”>> Read More
This Great Graphic, created on Bloomberg, shows Japan (white line) and China (yellow line) holdings of US Treasuries in November 2014 based on the latest TIC data.
Japan’s holdings rose to a record $1.24 trillion in November. This is a $56 bln increase from November 2013.
On the other hand, China reduced its Treasury holdings for the third consecutive month in November to $1.25 trillion. From November 2013, China’s Treasury holdings have fallen by $66 bln. An important caveat is that the TIC data often initially attributes buying to the financial center of the transaction and later revise to what it believes is the beneficial owner.
That said, Japan’s holdings of US Treasury’s may exceed China’s in 2015 for the first time since 2008. In addition, although some will see China’s decline in Treasury holdings as some kind of negative sign for the US, it is considerably more complicated than that. Treasury accumulation by China (and other central banks) is not desired by the US Treasury. Central bank accumulation of Treasuries is often a accomplished to resist adjustment of currency valuation. It is not clear how far the US Treasury will push this line, but there US officials are unlikely to be disturbed by the decline in China’s Treasury holdings.
The decline in China’s Treasury holdings have been gradual and minor. China’s holdings peaked in November 2013 just shy of $1.317 trillion. The decline could be mostly passive as issues mature. Given the low rates available at the short-end of the curve, China also appears to have done what many private investors have done, namely shift toward longer duration. China’s reduced holdings in the August-November 2014 period have not prevented a continued decline in US bond and note yields.
The magazine The Economist published an issue named “The World in 2015″. On the cover are odd images : A mushroom cloud, the Federal Reserve in a game called “Panic” and much more.
I wouldn’t normally dedicate an entire article analyzing the cover of a publication, but this isn’t any publication. It is The Economist and it is directly related to the world elite. It is partly owned by the Rothschild banking family of England and its editor-in-chief, John Micklethwait, attended several times to the Bilderberg Conference – the secretive meeting where the world’s most powerful figures from the world of politics, finance business and media discuss global policies. The outcome of those meetings is totally secret. It is therefore safe to say that the people at The Economist know things that most people don’t. For this reason, its “2015 prediction” cover is rather puzzling.
The bleak and sinister cover features political figures, fictional characters and pop culture icons that will surely make the news in 2015. However, most importantly, it also includes several drawings that are extremely symbolic and allude to important elements of the elite’s Agenda. Here’s the cover :
China is at mounting risk of a financial crisis this year as growth sputters and deflationary pressures trigger a wave of defaults, Bank of America has warned.
The US lender told clients that a confluence of forces are coming together that threaten to chill the speculative mania on the Shanghai stock exchange and to expose the underlying fragility of China’s $26 trillion edifice of debt.
“A credit crunch is highly probable,” said the bank in a report entitled “Deflation, Devaluation, and Default”, written by David Cui and Tracy Tian.
They said the country’s highly-leveraged companies cannot safely withstand President Xi Jinping’s drive to stamp out moral hazard and wean the country off excess credit, warning that the mix of slower growth and excess debt “could prove lethal for the financial system”.
Fasten your seatbelts; 2015 will be a whirlwind pitting China, Russia and Iran against what I have described as the Empire of Chaos.
So yes – it will be all about further moves towards the integration of Eurasia as the US is progressively squeezed out of Eurasia. We will see a complex geostrategic interplay progressively undermining the hegemony of the US dollar as a reserve currency and, most of all, the petrodollar.
For all the immense challenges the Chinese face, all over Beijing it’s easy to detect unmistakable signs of a self-assured, self-confident, fully emerged commercial superpower. President Xi Jinping and the current leadership will keep investing heavily in the urbanization drive and the fight against corruption, including at the highest levels of the Chinese Communist Party (CCP). Internationally, the Chinese will accelerate their overwhelming push for new ‘Silk Roads’ – both overland and maritime – which will underpin the long-term Chinese master strategy of unifying Eurasia with trade and commerce.
Global oil prices are bound to remain low. All bets are off on whether a nuclear deal will be reached by this summer between Iran and the P5+1. If sanctions (actually economic war) against Iran remain and continue to seriously hurt its economy, Tehran’s reaction will be firm, and will include even more integration with Asia, not the West.
Mainland China’s economy has presumably suffered another serious blow as its foreign trade growth has slowed dramatically in 2014 to an estimated 3.5%, far below the 7.5% target, according to a report by the nation’s Ministry of Commerce.
Mainland China’s Ministry of Commerce published yesterday a report on the nation’s foreign trade, showing that volumes of trans-border goods circulation added only 3.5% in 2014, as compared to the government’s target of 7.5%. However, soon after the initial publication, the report was replaced by an edited version with the numbers erased, according to a Reuters report.
China’s dramatic economic slowdown is explained in large part by the decline in global competitiveness of its manufactured goods as productions costs have increased for China’s facilities. These recent trade figures might be evidence of the irrelevance of the export-based growth model for China, underlining an urge for structural reform in the Communist nation.>> Read More
Beijing is willing to help Moscow and believes that Russia “has the ability and the wisdom to overcome the current economic difficulties,” the minister was quoted as saying by the South China Morning Post. Wang did not outline any specific measures, according to the newspaper.
Last week, China’s Minister of Commerce Gao Hucheng stated that China could increase the use of yuan in trade with Russia amid falling ruble rates.
Russia has seen a rapid depreciation of its national currency in recent months due to falling oil prices and sanctions imposed by the West over Moscow’s alleged involvement in the Ukrainian crisis.