Sun, 04th December 2016

Anirudh Sethi Report


Archives of “china” Tag

India : Tug-of-war over met coke levy

Sharp differences have emerged within the government over imposing an anti-dumping duty on met coke imports from China and Australia, with the commerce ministry pushing for the move and the steel ministry opposing it.

The directorate general of anti-dumping (DGAD), which is part of the commerce and industry ministry, has recommended a duty of $25 per tonne on imports from China and $16 per tonne on shipments from Australia.

Officials said a decision could be expected next week. India had last year raised the import duty on Chinese met coke to 5 per cent from 2.5 per cent.

 Meanwhile, the steel ministry is lobbying for an anti-dumping duty on alloy and non-alloy flat steel products from China and the European Union. Imports of these products have increased four-fold over three years.

The DGAD had initiated an anti-dumping investigation in January following a complaint filed by the Indian Metallurgical Coke Manufacturers Association on behalf of producers such as Saurashtra Fuels, Gujarat NRE Coke, Carbon Edge Industries, Bhatia Coke and Energy and Basudha Udyog.

The companies claimed Australian and Chinese companies were dumping low ash metallurgical coke, and only a levy could save an “otherwise dying domestic industry”.

5 Main Things To Watch In Today’s Chinese GDP Report

There is one simple reason why when the Chinese Q3 GDP print is revealed shortly, it will be an utterly meaningless indicator – the number, as not only traders but the general public know, is a goalseeked, arbitrary political construct meant to convey not information about the economy, but – at best – about Beijing’s intentions what it may or may not do in the future regarding future monetary or fiscal (which as we showed just hit an all time high) stimulus.

In fact, as Evercore ISI said in the company’s latest look at China, “China’s Real GDP data is opaque; Nearly invariant at 7 – 7.5%; No real, nominal, deflator detail; no income-expenditure cross check, etc. No data pros will answer questions.” In short: it is useless. An alternative, and much more informative index created by ISI, is shown by the red line in the chart below – unlike the blue line, or China’s official GDP data, it reflect the real twists and turns in China’s economy.

China’s yuan sinks to six-year low, then erases losses

China’s yuan fell to its lowest level in six years early Monday, breaching a key psychological threshold, before erasing the losses on the first day of trading after a week-long holiday.

Traders said the weakening of the yuan reflected strength in the dollar last week, and they did not see any signs of intervention by state banks to support the yuan after it fell.

 In mid-July, when the yuan last breached the 6.7 mark, state banks intervened heavily.

Some China watchers have wondered if any signs of yuan weakness following the holiday would signal that Beijing was putting the currency back on a slow depreciation path after holding it steady through September.

The currency fell after the People’s Bank of China set the midpoint at 6.7008 yuan per dollar, its weakest fix since September 2010 and about 0.3 percent weaker than the setting on Sept. 30, before a one-week National Day holiday.

China’s richest man warns of biggest bubble in history in Chinese real estate

Chinese billionaire Wang Jianlin warns of economic weakness

Chinese mogul Wang Jianlin warned that China’s economy will struggle for another two years and that China’s real estate market is the “biggest bubble in history.” He also said the economy hasn’t bottomed out yet.

Wang is ranked by Forbes as China’s richest man. His company has developed malls and office space across the company but has been cutting back on real estate.

More broadly, he said the US is his favorite place to invest.

CNN spoke with him:

The big problem, according to Wang, is that prices keep rising in major Chinese metropolises like Shanghai but are falling in thousands of smaller cities where huge numbers of properties lie empty.

“I don’t see a good solution to this problem,” he said. “The government has come up with all sorts of measures — limiting purchase or credit — but none have worked.”

Hong Kong offices are the world’s most costly to rent

Hong Kong is still the world’s most expensive city in which to rent offices in its skyscrapers and will remain so in the next three to five years, according to property consultant Knight Frank on Thursday.

Annual office rent in Hong Kong reached $278.5 per square foot in the second quarter, far ahead of New York’s $158 and Tokyo’s $149.5 per square foot. London ranked fourth with an average rent of $114 per square foot, according to Knight Frank’s latest Skyscraper Index, a survey of 31 cities around the world.

 Shanghai, which ranked ninth in the survey, recorded the world’s highest office rental growth at 7.6% in the first six months year-on-year, followed by Sydney at 6.6% and Hong Kong at 5.9%. Singapore was one of the underperformers with a rental fall of 7%, owing to abundant new office supply and a slowing local economy.

“I’m not sure if the rankings are a blessing or woe for Hong Kong… But I don’t expect other cities to easily catch up soon,” said Knight Frank’s senior director Thomas Lam, who predicted the territory’s prime office rents to grow 2-5% next year.

Underpinning Hong Kong’s robust office rental market is both a strong demand and a lack of supply of Grade-A offices. 

China Crushes Yuan Shorts As HIBOR Explodes 190% To 7 Month High

One week ago, with the Yuan having traded within fractions of what many consider a key psychological level for the USDCNY at 6.70, we reported that as many traders expected that following the just concluded G-20 meeting in China, the PBOC would finally relent in its devaluation defense, and let the currency slide on through to the other side. Not only did that not happen, but last Thursday the Chinese Central bank unleashed an unexpected and aggressive attack on currency Yuan shorts, the biggest since the January devaluation scare when the cost of borrowing yuan in Hong Kong soared to a seven-month high amid. The overnight HIBOR, or Hong Kong Interbank Offered Rate, jumped – seemingly without reason – by 3.88% points to 5.45%, the most expensive since February, according to Treasury Markets Association data. Other tenors joined with the one-week rate rose 2.09% points to 4.06%.

Chinese, Russian Navies Launch Largest Ever Joint Drill In South China Sea; Send Message To Washington

Perhaps it is not a coincidence that on the 15h anniversary of Sept11, China’s navy announced earlier that China and Russia will hold eight days of naval drills in the South China Sea off southern China’s Guangdong province starting from Monday. The exercises, previewed here at the end of July, come at a time of heightened tension in the contested waters after an arbitration court in The Hague ruled in July that China did not have historic rights to the South China Sea and criticized its environmental destruction there. As reported previously, China vehemently rejected the ruling and refused to participate in the case, and has been aggressively pushing an axis that involves Russia to counteract that regional tension which has seen the US spearhead the anti-China quasi alliance.

The “Joint Sea-2016” exercise will feature surface ships, submarines, fixed-wing aircraft, ship-borne helicopters and marines, the Chinese navy said in a statement on Sunday on its official microblog. The two countries will carry out defense, rescue and anti-submarine operations, as well as “island seizing” and other activities, it added.

Among the numerous exercises, which are meant to send a loud message to the US, Japan, Philippines and other “interested” parties who dispute China’s territorial claims on the artificial islands and reefs in the South China Sea, marines will participate in live-fire drills, island defense and landing operations in what will be the largest operation ever taken together by the two countries’ navies, the statement said.

China announced that it had called the “routine” naval exercise in July, saying “the drills were aimed at strengthening cooperation and not aimed at any other country.” One can almost sense the smile on its face as it wrote this.

As a reminder, China and Russia are veto-wielding members of the U.N. Security Council, and have held similar views on many major issues such as the crisis in Syria, often putting them at odds with the United States and Western Europe. Last year, they held joint military drills in the Sea of Japan and the Mediterranean.

Vietnam, Myanmar and Laos emerge as FDI magnets

Foreign direct investment into Southeast Asia’s less developed countries surged in the runup to the creation of the ASEAN Economic Community at the end of last year, a new report shows. Cambodia, Laos, Myanmar and Vietnam reaped a 38% increase, as multinationals clearly saw opportunities in the envisioned single AEC market.

The overall picture was less rosy, however. According to the ASEAN Investment Report 2016, overall FDI flows to the Association of Southeast Asian Nations bloc declined by 8% in 2015, to $120 billion. Investment from the EU fell 20% to $20 billion, while the figure from the U.S. dropped 17% to $12.2 billion.

 The report was announced on Tuesday by the ASEAN Secretariat and the United Nations Conference on Trade and Development at the ASEAN Business and Investment Summit (ABIS) 2016.

On the brighter side, FDI from Japan increased 11% to $17.4 billion. China’s number rose 17% to $8.2 billion, and India’s swelled 107% to $1.3 billion.

The strongest growth was seen in the so-called CLMV countries, with the 38% jump bringing their figure to $17.4 billion, from $12.6 billion in 2014. Their share of FDI in the region increased to 14%, from 10%.

South China Sea Time Bomb: Beijing Sets “Red Line” on Japan-US Joint Operations

In this April 26, 2012 file photo released by China's Xinhua News Agency, Chinese navy's missile destroyer DDG-112 Harbin fires a shell during the China-Russia joint naval exercise in the Yellow SeaOn Saturday, diplomatic sources confirmed that China had issued a severe warning to Tokyo in late June demanding that Japan refrain from dispatching Self-Defense Forces to join US operations testing the freedom of navigation in the South China Sea.

Japan will “cross a red line” if SDF vessels take part in the freedom of navigation operations, Chinese Ambassador Cheng Yonghua conveyed to Tokyo at the time. Cheng threatened military action if Japan failed to comply with the ultimatum.

The warning came two weeks prior to The Hague international arbitration court’s adverse ruling deeming the waters and territory that the Chinese people had historically viewed as their own were to be stripped of their control and that Beijing must immediately remove itself from the disputed territory.

On Saturday, diplomatic sources confirmed that China had issued a severe warning to Tokyo in late June demanding that Japan refrain from dispatching Self-Defense Forces to join US operations testing the freedom of navigation in the South China Sea.

Chinese appetite fuels higher pork prices.YTD Up by 10%

Chinese consumers just cannot get enough pork. The richer the nation becomes, the more pigs its citizens want to eat. Despite a seasonal dip in pork consumption during July — the Chinese eat less meat in warmer months — prices are up 10% so far in 2016 compared to the same period last year, and some forecast that pork demand this year will soar by 30% from a year ago.

Prices for the white meat are currently just below the record high of 21.2 yuan ($3.1) per kilogram reached at the end of June 2016, up from the recent low mark of 12 yuan in early 2015, according to official Chinese figures.

 One reason for the price jump is that a large number of pigs died as a result of heavy rains, landslides and flooding in northern China in July, which affected 10 provinces or regions. About 10,000 pigs drowned at a village in Hubei province alone, according to Chinese media reports.

The outlook for domestic pork supply could worsen, as the National Bureau of Statistics has said that five of the provinces hit hardest by the flooding produce a third of China’s pork.

Another factor squeezing pork supply has been the rising price of corn — the key ingredient in pig feed — which rose by 11% from January to May, according to China’s Ministry of Agriculture.