Lots of speculation on oil price hikes

I don’t normally write so much about the stock market but today, like yesterday, the stock market seems to be at the center of events. Not unexpectedly the SSE Composite started the day badly after yesterday’s awful 4.5% drop to 3443. By midmorning it was down a whopping 2.6%, to 3355. Later in the morning, […]

Foreign Direct Investment Flows within Developing Asia

While developing Asian countries will remain important recipients of FDI flows, many Asian firms are consciously attempting to invest overseas for a number of reasons. Indeed, many Asian companies have made headlines as they have been on a hectic buying spree over the last few years. According to UNCTAD data, gross FDI inflows to Asia […]

The effect of the earthquake is increasing uncertainty

The stock market seems to be getting increasingly worried about the economic impact of the earthquake, even though Sichuan province comprises just 4% of China’s GDP production and most of Sichuan’s most developed areas, including its capital Chengdu, were left relatively unscathed. Still, it seems that uncertainty has increased in a variety of areas and […]

Defer the RBA “Enhanced Independence” Act

Every month I publish a report on my own blog to coincide with the meeting of the Reserve Bank of Australia (RBA). I will now cross post this entry to Asia EconoMonitor, as well as writing special pieces from time to time. This month’s Debtwatch is focused on Australian economic policy, but it has global […]

The devastating earthquake is also bad for monetary policy

This has been a sad week for China, and it has certainly not been easy to watch on television the heartbreaking scenes of the effect of Monday’s earthquake. Sichuan is a heavily populated province, and many of my students have friends and family in the affected areas, so the disaster has hit us very hard. […]

What happened to global food prices?

Before we get to the arguments, here’s a picture with the key facts from Martin Wolf’s recent FT column on the subject: Explanations that don’t persuade Hypothesis: The spike in world food prices is caused by increased demand in China and India, particularly the shift towards consumption of meat as people get richer. My problem […]

Inflation equals monetary tightening equals asset deflation

The rumors were correct. April inflation came in at 8.5%, showing no sign of slowing from the 8% range first reached in February. This will not allow the People’s Bank of China (PBOC) to relax monetary policies. In fact, we can expect further increases in reserve requirements and quite possibly an interest rate increase before […]

Demographic projections and trade implications

With yesterday’s bad April CPI number, the subsequent increase in minimum reserve requirements to 16.5%, and the slowing will-they-won’t-they appreciation of the RMB, it is tempting to stick to monetary topics in this and the next few blog entries, but regular readers know what I am going to say anyway. First, inflation may get a […]

China, the Complex

After serving as a professor at Peking University and on the board of a Chinese merchant bank, American executives often ask me, “What are the three most important things I need to know to do business in China?”  I usually tell them this advice 1) Go spend a lot of time out there.  2) repeat […]