The refusal of Western economies to acknowledge their shortcomings leading to the 2008 global economic meltdown suggests that Asian economies are well advised not to heed the International Monetary Fund's call to channel their funds into Europe, says this editorial. It says poorer countries now can avoid the trap South American nations fell into when taking the advice of developed nations in the 1970s. Shanghai Securities News (06/12)
2. Chinese official sees 2nd-quarter GDP gain below 7%
The gloomiest forecast yet for China's growth this year was issued in published remarks by Zheng Xinli, deputy head of the China Center for International Economic Exchanges, a government think tank. Zheng said in the overseas edition of the People's Daily that the annual rate of GDP growth may dip below 7% for the second quarter unless economic data improve markedly in June. Reuters (06/13)
3. China trims key interest rates in market-lifting move
In the face of a cooling economy domestically and the far-from-resolved eurozone crisis, the People's Bank of China lowered its one-year lending and deposit rates by a quarter percentage point. Predicting at least one more reduction later in the year, Shen Jianguang, a Hong Kong-based economist with Mizuho Securities Asia, said that data to be released over the weekend by China "must be very weak and inflation must have eased sharply." The move, the first rate cut since 2008, caught analysts by surprise and helped to lift global markets Thursday. Reuters (06/07) Xinhuanet.com (China) (06/07) Wall Street Journal (Asia), The(06/07) Bloomberg (06/07)
4. China's banks are expected to continue to accelerate lending pace
Loosening by China's central bank is taking hold, with bank lending in May up sharply from the previous month. Slow domestic demand amid easing inflation cleared the way for the People's Bank of China to allow more aggressive lending, even as the Beijing government proceeded with several measures of modest stimulus. Analysts say they expect another lending pickup in June. Reuters (06/11) Wall Street Journal, The (06/11) Caijing (06/11) Xinhuanet.com (China)(06/11)
5. Some Asian ratings may fall due to Europe's debt crisis
Debt ratings for some Asian economies may be jeopardized by the European sovereign debt crisis, Fitch Ratings says. Fitch cites heavy external-funding needs and poor balance sheets for the linkage, which could affect Sri Lanka, India and Indonesia. Korea Herald (Seoul), The(06/12)
6. China steps up, broadens foreign investments
China is pursuing an ever more aggressive but opaque investment strategy overseas, with at least six arms buying up securities and assets and moving prices globally. Financial Times (tiered subscription model) (06/11)
7. Dimon expresses regret at Senate hearing
Questioning of JPMorgan Chase Chief Executive James Dimon largely divided along party lines in a Senate hearing, with Dimon reiterating opposition to parts of the Dodd-Frank financial overhaul, including the Volcker rule. Dimon again expressed regret over the bank's recent losses and said he supported stiffer capital requirements. As for the losses, he said it was a matter of traders poorly understanding the risk involved and managers' "ineffective" handling of the traders. Washington Post, The (06/13) Wall Street Journal, The (06/13) CNBC (06/13)Los Angeles Times (tiered subscription model) (06/13) Forbes (06/13)
8. China's consumer price index signals inflation is subsiding
China's consumer price index in May indicated a 3.0% pace of inflation, down from 3.4% the previous month, as food prices moderated and demand slowed. Meanwhile, the producer price index was down 1.4% as commodity prices eased. Xinhuanet.com (China) (06/09) Forbes(06/08)
9. China's strong May trade surplus contrasts with domestic slowdown
China's May exports surged 15.3% from the year-earlier figure, easily topping analysts' forecasts and suggesting that global economic ills, principally in Europe, have yet to touch China. However, industrial output for the month and retail sales came in lower than expected. With the robust export performance, "the key to securing a soft landing pivots on reviving domestic demand, and that will necessitate more stimulus, but it will be more measured than in 2008 and monetary policy won’t be eased excessively," observed Sun Junwei, a Beijing-based economist with HSBC Holdings. Australian (subscription required), The (06/11) Bloomberg(06/10) Financial Times (tiered subscription model) (06/10)
10. Private equity groups look at U.S.-listed Chinese companies
Many of the more than 400 Chinese companies with U.S. listings have become prospective targets for private equity funds. However, the "appetite is there ... the price isn’t right," said Richard Campbell-Breeden, head of M&A in Asia at Goldman Sachs. Financial Times (tiered subscription model) (06/11)
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