China in April tightened its previously loose monetary policy in an effort to curb fears of new asset bubbles. State bank lending fell from a record RMB 1,891 billion in March to RMB 591.8 billion ($85.2 billion). Last month’s lending, however, was still well above the monthly levels of previous years. Besides fears of new asset bubbles and a build up of non-performing loans, critics also point to the risk of rampant inflation. While recent indicators show China still in deflationary territory, the large-scale capital injections of the last months raise the potential for high inflation in the second half of this year. Most of the loans in the first quarter this year were from state banks to government-backed infrastructure projects, with many smaller private enterprises still unable to access urgently needed credit from banks. Private investment remains weak and China’s economic recovery so far depends mostly on government initiated injection of huge volumes of new loans.
While fixed-asset investment growth in urban areas in China reached an astonishing 30.5 percent in the first four months this year, exports dropped a staggering 22.6 percent in April from a year earlier. Chinese economists point to the importance of domestic demand as Chinese export destinations in America and Europe show no significant signs of recovery yet. China’s trade surplus of $13.1 billion in April was at its lowest for a non-holiday month in more than two years. With the severe drop in export actually contributing negatively to economic growth, domestic demand and government initiated investment are all the more important for China to reach its ambitious goal of 8 percent GDP growth this year.
Chinese ports increasingly pin their hopes on rising domestic trade. As cargo throughput for overseas markets dropped more than 6 percent year-on-year in April–the sixth month of consecutive decline since November last year–Chinese ports are stepping up their investments in domestic trade infrastructure. Some of the country’s largest cargo ports, including Shenzhen-Yantian, Ningbo and Tianjin, have announced plans to add new domestic shipping routes and to increase container throughput for domestic trade.
A few months ago, I wrote about the early stages of the conflict in Ukraine through the lens of Sun Tzu’s The Art of War. While it appears likely that the war will carry on into the foreseeable future, enough time has passed for us to make an honest assessment of each side’s relative […]
The Ukrainian Army has made dramatic strides in the last few weeks. Ukraine’s tactical commanders have outfoxed their Russian counterparts, and by issuing a feint towards the south the UA has been able to earn substantial gains in the north of their country. The impact of these efforts have been compounded by the steady stream […]
In mid-May the Irish political party, Sinn Féin, won the plurality of seats in the Northern Ireland Assembly. Many American readers might not fully understand the significance of Sinn Féin’s political victory- but rest assured that subjects of the United Kingdom and a wide range of political movements the world over have heard the message […]
The first wave of the Russian offensive in Ukraine has fallen short of Russian autocrat Vladmir Putin’s ambitions. Most analysts deduced that Putin had hoped to achieve a decapitation strike of the Ukrainian government- taking Kiev and replacing Ukrainian President Vladimir Zolinski with a pro-Kremlin voice. Kiev has been threatened repeatedly through the course of […]
On the weekend of March 26th, the notorious MS-13 gang went on a massive killing spree in El Salvador which left more than 70 people dead by Sunday. Even for a country where powerful gangs hold massive sway, this recent tragedy stands out considering that it was the bloodiest day on record since the civil […]
