of the accused insider traders in the Galleon affair live within a
few hundred yards of this office, on Sutton Place. I do not think I
ever saw Raj Rajaratnam, who is very large and a Sri Lankan Tamil, a
paucity of which exists even my very global city. But I see ladies
looking like Danielle Chiesi all the time and she may well have
passed into my sights.
Australo-informants at Macquarie in Hong Kong have revised
their predictions for 2009 and 2010 GNP growth in the Pacific Rim.
They call their report The New Reality.
most dramatic forecast is that China growth next year will hit 10.3%
vs an earlier growth figure from the same analysts of only 8.9%. Hong
Kong and Taiwan growth was also adjusted upward but very modestly.
The drop in GNP in Singapore for 2009 was reduced to minus 1.5% from
minus 2.5%. But what really intrigued me is the China forecasts.
expects that trade surpluses for China will shrink from an estimated
9.1% of gross national product last year to 3.8% in 2010. It evaded
the issue of a forecast of the 2011 trade surplus.
can no longer use domestic productivity gains to convert expensive
commodities into cheap i-Pods (or whatever.) Exports are weak. The
main state-sector enterprises, beneficiaries of the stimulus program,
are inefficient and reduce productivity.
the rise in Chinese output the analysts expect cannot be export
driven. It will be the result of quantitative easing, banks lending
more to inefficient SOES, and domestic demand stimulating local
Chinese consumption. This reduces productivity rather than boosting
international implications are fascinating. China’s monetary easing
will mean there is more money around. If the US parallel is anything
to go by more dollars means cheaper $s. Will more renminbi mean
is ducking the question citing cyclicality. China still is growing
its market share in export markets (even though it is exporting
less.) So there will be increased money flow from foreign countries
for Chinese goods. Moreover, there will be greater inflows of
investment, both direct and portfolio. So foreign currency inflows
will continue to grow even though Chinese export dependence will
balance, Macquarie expects, will be struck so the RMP breaks to the
upside. They expect the 6.83 to the dollar peg to break in 2010 as
the Chinese currency forges ahead.
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