Tag Archive for China economic growth

Untameable China stock market | The Economist report two days ago on trends

The recent Chinese stock market mini-crash has underlined the fundamental role of debt in Chinese share-trading.

The Economist reported that Goldman Sachs reckons outstanding margin financing, at 2.2 trillion yuan ($355 billion) earlier last week, was the equivalent of 12% of the value of all freely traded shares on the market, or 3.5% of China’s GDP.

Both “are easily the highest in the history of global equity markets,” its analysts noted.

With Chinese shadow banks and peer-to-peer lenders also offering cash to investors, the amount of hidden leverage in the market is estimated to be as much as 50% higher. That debt helped fuel the initial stock rally. It is now adding to the pain, as leveraged investors rush to sell their holdings to cover their debts.

The Economist argues the case as to long term impacts on further China economic development as this market confidence struggle plays out.

Go to: http://www.economist.com/news/business-and-finance/21656867-bad-week-chinas-stockmarkets-could-be-felt-years-untameable-market

Also see the BBC for second source economic reports on this China story.

Cheers!

 

 

 

 

Stunning graph shows drop in China’s rate of economic growth as of year 2014 versus ten year average

Sometimes one graph says a great deal.  This is one of those graphs.  If the numbers have been plotted correctly, it shows the significant change in former super cycle growth of China’s economy.

The due diligence questions is, what will the next five to ten years be like.  and how will it affect global resource and rail/mine/port projects on the drawing board?

Which will prosper under a much lower growth scenario?

Those with the lowest production cost per unit will have the best chance of success if the super cycle has cooled.

For more log onto story line by Frik Els; June 12, 2015    …” signs of China’s steel, iron, coal industry growth collapsing”.

At:   http://www.mining.com/charts-chinas-steel-iron-coal-industry-growth-collapsing/

 

Stunning graph shows collapse of China super 10 year growth rates by year 2014