The US and China just finished the so-called US-China Strategic and Economic Dialogue. There was progress - less protectionism from China was key among these.
China of course has been booming but we saw this morning that China’s industrial output increased less than expected (13.4% yr / yr) for April. So it looks as if the Bank of China’s tighter monetary policy is working (Apr/5 was the last rate hike). We also see that consumer inflation came off a bit in April from the 32-month March high (5.4% annualized).
These are good things and prevent a government panic. A controlled slowdown is what we all want. And US interests have improved as China appears more willing to allow the Yuan to strengthen, and the recent talks should further the process. Also, China has allowed the Yuan to strengthen to fight inflation. So this is good news for US exporters.
China is not a "wild card" in the economic sense. They are well managed. From Reuters: "The Chinese government knows it’s time for a change. The old economic model based on cheap exports and eye-popping investment can’t be sustained. The latest five-year plan, covering 2011-2015, aims to boost internal consumer demand as the main engine of growth. It envisages a bigger share in the economy for services, which are currently only 43 percent of GDP — barely half America’s level. The plan calls for more high-tech industry and for greener, less carbon-intensive growth. There’s also to be a big push into social housing, so the poor can afford somewhere to live."
Robert Craven
China of course has been booming but we saw this morning that China’s industrial output increased less than expected (13.4% yr / yr) for April. So it looks as if the Bank of China’s tighter monetary policy is working (Apr/5 was the last rate hike). We also see that consumer inflation came off a bit in April from the 32-month March high (5.4% annualized).
These are good things and prevent a government panic. A controlled slowdown is what we all want. And US interests have improved as China appears more willing to allow the Yuan to strengthen, and the recent talks should further the process. Also, China has allowed the Yuan to strengthen to fight inflation. So this is good news for US exporters.
China is not a "wild card" in the economic sense. They are well managed. From Reuters: "The Chinese government knows it’s time for a change. The old economic model based on cheap exports and eye-popping investment can’t be sustained. The latest five-year plan, covering 2011-2015, aims to boost internal consumer demand as the main engine of growth. It envisages a bigger share in the economy for services, which are currently only 43 percent of GDP — barely half America’s level. The plan calls for more high-tech industry and for greener, less carbon-intensive growth. There’s also to be a big push into social housing, so the poor can afford somewhere to live."
Robert Craven
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