Is China’s Cash Crunch Returning?

August 28, 2013, 7:00 PM

Is China’s Cash Crunch Returning?

Is it time for a return of China’s cash crunch?

A spike in money-market rates in June raised fears about the stability of China’s financial sector, pushed equity markets sharply lower, and had investors running for cover. A peek at the overlooked role of China’s Ministry of Finance in the money markets suggests another scare might not be far away. The People’s Bank of China has the lead role in managing funds in China’s financial market, but the movement of tens of billions of yuan in tax receipts and public spending in and out of the financial system also has a major impact, and sometimes pulls in the opposite direction of the central bank. Read more of this post

Yet to Buy Into Abenomics, Wives Cut Husbands’ Pocket Money

August 29, 2013, 3:47 PM

Yet to Buy Into Abenomics, Wives Cut Husbands’ Pocket Money

By Kana Inagaki

Japanese men hoping to reap the benefits of the economic upturn with an increase in their monthly spending cash will be disappointed to find this won’t be happening anytime soon. It seems their wives, who typically control family purse strings in Japan, have yet to buy into Abenomics. According to an online survey of 3,300 individuals carried out by Orix Bank Corp. in July, the average monthly spending allowance of men fell by 11% compared with last year’s survey, falling to Y30,468 ($310). Read more of this post

Asia: Storm defences tested

August 28, 2013 7:23 pm

Asia: Storm defences tested

By David Pilling and Josh Noble

Emerging markets are less vulnerable to shocks than they were in the late 1990s

These days it seems practically everything is made in Asia. Everything, that is, apart from economic crises. For the moment, at least, those can still be produced in the US. Ever since Ben Bernanke, chairman of the US Federal Reserve, hinted in May that there may be an end in sight to the policy of aggressive monetary easing, emerging markets have been severely tested. Talk of tapering the Fed’s purchase of $85bn a month in government bonds from as early as September has pushed up long-term US interest rates. That in turn appears to have triggered a partial reversal of the carry trade in which investors borrow in dollars to purchase higher-yielding assets, often in emerging markets. Currencies and stock markets around the world, especially in countries with current account deficits financed by fickle capital inflows, have tumbled. Read more of this post

Mao-era thrift shunned for good life on credit

August 28, 2013 5:00 pm

China’s consumers take eagerly to credit

By Simon Rabinovitch in Shanghai

A few years after finishing university, Jack Dai thought he had scored the holy trinity of success for a young Chinese man: a government job, an apartment and a wife. But he had not counted on one additional factor, less visible from the surface, that soon drove a wedge between him and his conception of the good life. To buy his Shanghai house, Mr Dai, 30, took out a hefty mortgage. Monthly repayments now swallow up half his salary. Plus he has the other expenses of Chinese middle-classdom – overseas holidays, shopping excursions, movies and restaurants. Read more of this post

Asia’s Hot-Money Meltdown; Receding capital flows suggest deeper structural flaws in emerging economies.

August 28, 2013, 12:23 p.m. ET

Asia’s Hot-Money Meltdown

Receding capital flows suggest deeper structural flaws in emerging economies.

LIM SAY BOON

Investors are starting to whisper what was unthinkable just a few months ago, that emerging Asia faces another financial crisis. While this remains unlikely, stocks in China, Indonesia, Philippines, and Thailand are already in a bear market that will likely broaden and intensify. The problems are both cyclical and structural, and policy options are limited. The recent stock-market falls and currency routs suggest the coming months will be rough. Singapore’s Straits Times index, Taiwan’s Taiex, Korea’s KOSPI, India’s Sensex and Malaysia’s KLCI have either broken or are breaking below important technical supports, with the likelihood of accelerated losses ahead. There may be corrective rebounds in emerging-market currencies and equities over the coming week or two, but these are likely to be pauses rather than reversals. There are no quick fixes to the savings deficits in the economies worst hit by falling currencies, equities and bond prices. Read more of this post

China SOE Accounting — BAAP Not GAAP Applies

China SOE Accounting — BAAP Not GAAP Applies

2013-08-23 18:16:41

Peter Fuhrman, Chairman and CEO China First Capital

If the last two years of crisis in investing in Chinese companies proves anything, it’s that any Chinese company that pays more tax than it should, documents every transaction and practices the most forensic accounting methods is the one with the calmest, happiest investors. Such companies are very rare among the thousands invested in by private equity, and not very common among publicly-traded ones, if securities regulators in the US and Hong Kong are to be believed. Read more of this post

China Seeks Western-Style Care Amid Explosion of Elderly

China Seeks Western-Style Care Amid Explosion of Elderly

The Chinese increasingly eat, shop and play in ways their Western counterparts would instantly recognize. They’re aging like them too, living longer lives that are often limited by debilitating illnesses. As the almost 200 million population of over-60s more than doubles in the next 40 years, China faces a deluge of infirm elderly who can’t live alone. Nor can they rely on Confucian tradition of children caring for their parents: the country’s one-child policy has left fewer offspring to share the load, while more Chinese are moving away from home to study or work. Read more of this post

Harleys With Joysticks End Century of Bike-Design Inertia; Harley cut the product-development cycle to three years from about five or six. By reducing 11th-hour tinkering, the company accelerated the process and lowered the cost

Harleys With Joysticks End Century of Bike-Design Inertia

Road hogs are getting high-tech.

Harley-Davidson Inc. (HOG)’s newest models feature a voice-activated and touch-screen GPS system, the first on a production motorcycle. When the bike is getting low on fuel, the system finds the nearest filling station and maps out directions on a 6.5-inch (16.5 centimeter) screen the rider can control by voice, touch or joystick.

What’s also new is how the company decided what to include: It asked its customers. For the first time, 110-year-old Harley is using customer focus groups and dealer clinics as it develops models and features. Last week, the first wave of new bikes from those changes began arriving in dealerships. Read more of this post

Cotton Glut Expands to Record as Hanes Profit Gains

Cotton Glut Expands to Record as Hanes Profit Gains: Commodities

The fourth straight year of surplus cotton output and the biggest drop in Chinese imports since 2000 are creating record global inventories, signaling higher profits for the makers of Hanes underwear.

Stockpiles will jump 8.6 percent to 93.765 million bales in the 12 months ending in July, the U.S. Department of Agriculture said in an Aug. 12 report. There are enough inventories to make three pairs of jeans for every person in the world and reserves doubled since reaching a 13-year low in 2010. Prices may fall 8.5 percent to 76.6 cents a pound by the end of 2013, according to the average of 16 analyst estimates compiled by Bloomberg. Read more of this post

E-Cigarettes Just Passed The $1 Billion Sales Mark

E-Cigarettes Just Passed The $1 Billion Sales Mark

ROB WILE AUG. 28, 2013, 1:31 PM 1,369 1

A shop owner, who gave his name as Yohan, uses an electronic cigarette near a poster which reads “electronic cigarette, free trial” in his shop in Nice June 7, 2013. France intends to ban electronic cigarette smoking in public places by imposing the same curbs enforced since 2007 to combat tobacco smoking. E-cigarettes is officially a $1 billion per year business. This is according to Wells Fargo data cited by V2 Cigarettes, a major online electronic cigarette retailer. Sales in brick and mortar stores are now at $700 million annualized, while online transactions are expected to tick at least $500 million.  “When combined with online sales, the industry has now exceeded $1 billion for the first-time ever, with the consumption of e-cigs likely surpassing that of traditional cigarettes in the next decade,” Wells Fargo’s Bonnie Herzog said.  Read more of this post

Rubber farmers in Thailand have blockaded roads and train tracks over the past week to pressure the government to guarantee a rubber price to bolster their incomes, as it has done for rice growers.

August 28, 2013, 11:13 a.m. ET

Thai Rubber Farmers Protest Over Prices

Roads and Rail Blockaded as Demonstrators Want Government Action to Buttress Their Incomes

WARANGKANA CHOMCHUEN

BANGKOK—Rubber farmers in Thailand have blockaded roads and train tracks over the past week to pressure the government to guarantee a rubber price to bolster their incomes, as it has done for rice growers. Hundreds of rubber farmers began gathering last weekend in the Cha-uat district of Nakhon Si Thammarat province, about 480 miles south of Bangkok, complaining the government has neglected the 60% drop in rubber prices since a record high in February 2011. Read more of this post

The Park Geun-hye government is backpedaling on her much-touted hard-line stance against large conglomerates as it appears that her administration will ease regulations in their favor

2013-08-28 18:11

Park backpedals on chaebol policy

By Choi Kyong-ae
The Park Geun-hye government is backpedaling on her much-touted hard-line stance against large conglomerates as it appears that her administration will ease regulations in their favor, political analysts said Wednesday. “President Park is definitely backpedaling on her trademark policy of ‘economic democratization’ after she called in chaebol leaders (to Cheong Wa Dae) to ask them to make investments to stimulate the economy,” Lee Phil-sang, invited professor of the department of economics at Seoul National University, said in a telephone interview with The Korea Times. Read more of this post