China pide paso... II

China's economy stumbles in May, growth may fall in second quarter

By Langi Chiang and Jonathan Standing

BEIJING | Mon Jun 10, 2013 6:25am BST

(Reuters) - Risks are rising that China's economic growth will fall further in the second quarter and that full-year forecasts will be cut further, after weekend data showed weakness in May exports and domestic activity struggling to pick up.

Evidence has mounted in recent weeks that China's economic growth is fast losing momentum, but Premier Li Keqiang tried to strike a reassuring note, saying the economy was generally stable and that growth was within a "relatively high and reasonable range".

China's economy grew at its slowest pace for 13 years in 2012 and so far this year economic data has surprised on the downside, bringing warnings from some analysts that the country could miss its growth target of 7.5 percent for this year.

"Growth remains unconvincing and the momentum seems to have lost pace in May," Louis Kuijs, an economist at RBS, said in a note. "The short-term growth outlook remains subject to risks and we may well end up revising down our growth forecast for 2013 further."

Exports posted their lowest annual growth rate in almost a year in May at 1 percent, exposing a more realistic picture of trade ***owing a crackdown by authorities on currency speculation disguised as export trades to skirt capital controls.

That speculation had created double-digit rises in export growth every month this year even as world growth stuttered.

May exports to both the United States and the European Union - China's top two markets - both fell from a year earlier for the third month running.

Imports fell 0.3 percent, against expectations for a 6 percent rise, as the volume of many commodity shipments fell from a year earlier.

The volume of major metals imports, including copper and alumina, fell at double-digit rates. Coal imports fell sharply.

"The trade data reflects the sluggish domestic and overseas demand, signalling a slower-than-expected recovery in the second quarter," said Shen Lan, an economist at Standard Chartered bank in Shanghai.

The Australian and New Zealand dollars plumbed fresh multi-month lows on Monday after the data from China, the biggest export market for both countries, while London copper fell to its lowest since mid-May on concerns over Chinese industrial demand.

China's financial markets are closed for a public holiday from Monday to Wednesday, but Hong Kong shares rose 0.5 percent and Japanese and South Korean shares also rose, taking heart from solid U.S. jobs data..

SLOW AT HOME TOO

A government factory survey of purchasing managers and a similar poll sponsored by HSBC, both issued earlier this month, showed export orders falling in May, suggesting the outlook remained grim.

Inflation, bank-lending growth and investment were below expectations in May, while factory output and retail sales rose around the same pace as in April.

China's consumer inflation slowed to 2.1 percent, the lowest in three months, while producer prices (PPI) fell 2.9 percent, the lowest since September. A Reuters poll had forecast consumer inflation at 2.5 percent and factory-gate prices down 2.5 percent.

"The inflation data showed China's economic growth continued to slow down. Second-quarter growth is probably even slower than the first quarter. In particular, the PPI data showed very weak demand," said Jianguang Shen, chief China economist at Mizuho Securities Asia in Hong Kong.

Central bank data showed Chinese banks made 667.4 billion yuan ($109 billion) in new loans in May, below market expectations of 850 billion yuan and down from April's 792.9 billion yuan.

M2 money supply rose 15.8 percent from a year earlier, slightly below a median forecast of 15.9 percent, while total social financing, a broad measure of cash in the economy, was 1.19 trillion yuan versus 1.75 trillion yuan in April.

Retail sales, fixed-asset investment and industrial output met expectations, rising 12.9 percent, 20.4 percent and 9.2 percent from a year earlier, respectively.

RATES AND OTHER REMEDIES

Economic growth slipped to 7.7 percent in the first quarter, down from 7.9 percent in the previous quarter. Both the International Monetary Fund and the Organisation for Economic Co-operation and Development cut their forecasts for China's 2013 economic growth in May, to 7.75 percent and 7.8 percent respectively.

But the further loss of momentum in April and May could prompt the central bank to try to give the economy a lift, said Jian Chang, China economist for Barclays in Hong Kong.

"We had expected an L-shaped economic recovery in China and that the growth would stabilise at around 7.9 percent," Chang said.

"We now think China's growth will stabilise at around 7.6 percent (this year). The possibility for the central bank to cut interest rates is now rising," Chang said.

In a later note she cut her 2013 forecast to growth of 7.4 percent from a previous 7.9 percent, and her 2014 growth forecast to 7.4 percent from 8.1 percent.

Government economists from top think-tanks in Beijing told Reuters last week that the new leadership of President Xi Jinping and Premier Li would tolerate quarterly growth slipping as far as 7 percent year-on-year before looking to lift the economy, focusing on economic reforms rather than short-term stimulus.

Li was quoted by state television as saying that China's economy was generally stable, while China Central TV reported that Xi told U.S. President Barack Obama during his visit to the United States that "we are confident of maintaining long-term sustainable economic growth".

He acknowledged China was at a "critical moment of economic restructuring" but that it would bring "enormous" potential.

Cutting interest rates would be a difficult decision for the central bank for antiestéticar that providing cheaper credit could exacerbate a rise in property prices, which policymakers have been trying to contain.

"Property prices will jump if it cuts rates as recent government cooling measures have not achieved desired results," said Tang Jianwei, senior economist at Bank of Communications in Shanghai.

"And cutting rates may not be effective in slowing speculative money inflows, which are mainly driven by expectations of yuan appreciation."

Most economists agree however that the government will avoid major stimulus along the lines of its 4 trillion yuan package unleashed in response to the global financial crisis in 2008. It sparked a lending boom, which fuelled a property bubble and left local governments under a pile of debt.

The new leadership is keen to push economic restructuring towards domestic consumption and away from reliance on exports and investment for growth.

Sources told Reuters in May that a consensus had been reached among top leaders that reforms would be the only way to put the world's second-largest economy on a more sustainable footing.

Hacer clic para expandir...

¿Se está gestando un 'Minsky moment' en China?

LAS PERLAS DE KIKE
10/06/2013

Hyman Minsky, un economista revolucionario que criticó la eficiencia de los mercados mientras ésta encandilaba a la mayoría de compañeros de profesión de la época. Él observaba euforias y depresiones, burbujas de crédito y pánicos, observaba poca racionalidad y mucha psicología humana, por lo que sus teorías fueron poco convencionales… y también poco escuchadas. Murió en el año 1996 sin encontrar el reconocimiento que se merecía, pero hoy, años después y con varias crisis a nuestras espaldas, se estandariza un nuevo concepto: el “Minsky moment”. Las ideas de Hyman Minsky vuelven con más fuerza que nunca.

¿Qué es el “momento Minsky”? Se dice que fue Paul McCulley, de PIMCO, quien en 1998 acuñó dicho término para referirse a la posible última etapa de una burbuja financiera, por aquel entonces hablando de Rusia. Tras la euforia, la asunción excesiva de riesgo y deuda, llega un punto en el cual los activos dejan de subir y se produce una venta desordenada; se saldan activos en busca de liquidez para hacer frente a la carga financiera, pero nadie parece estar dispuesto a comprar, por lo que se produce un aparentemente irracional “Minsky moment”. O en palabras de Krugman, el punto en el cual los “margin calls” provocan el desapalancamiento. La presente crisis le ha dado la razón.

Si bien, la pregunta que se están haciendo ahora mismo la mayoría de analistas a lo largo del mundo es, ¿se está gestando un “Minksy moment” en China? Y todo por un informe de Yao Wei, una economista de Societe Generale, en donde calcula el “Debt Service Ratio” del país con un resultado inesperado. El Debt Service Ratio (DSR) es el ratio resultante de sumar el principal a pagar más los intereses y dividirlo entre los ingresos, o lo que es lo mismo, ¿cuánto hay que pagar y cuánto tenemos para ello? (Existen discrepancias sobre la nomenclatura, usando en este caso la del BIS, ver también Debt Coverage Ratio).

Este ratio se considera uno de los indicadores más fiables de salud financiera, pues no solo tiene en cuenta el nivel de deuda (como sería el caso de “Deuda / PIB”), sino que también valora el tipo de interés y el vencimiento, mostrando la verdadera capacidad de hacer frente a la deuda. El BIS observa que aquellos países que superan un nivel del 20% - 25% de carga financiera en relación a sus ingresos, tienen altas probabilidades de sufrir una crisis financiera – bancaria, ocurriendo eso en los casos analizados y en otros incluso con un ratio menor.

¿Qué ocurre con China? Asumiendo una deuda privada del 145% sobre el PIB, un tipo de interés medio del 7,8% y un vencimiento medio de 6,3 años, y asumiendo que toda esa deuda tiene carga financiera, Yao Wei llega a la conclusión, según palabras recogidas por FT Alphaville, de que:

“(…) we then arrive at a shockingly high debt service ratio of 29.9% of GDP, of which 11.1% goes to interest payment (=7.8%×145 % of GDP) and the rest principal. At such a level, no wonder that credit growth is accelerating without contributing much to real growth!”

Hacer clic para expandir...

¡Han leído bien, un Debt Service Ratio (DSR) de casi el 30% del PIB! ¡Una locura absoluta! ¿Cómo puede ser esto posible? Pues Yao Wei cree que seguramente sea en realidad algo menor, aunque igualmente por encima de los niveles que llevaron a la crisis a países como Finlandia (1990), Corea (1997), o Reino Unido, EEUU y España en la crisis actual, por lo que su conclusión es que:

“The assumption of an instalment-loan schedule implies that roll-over is not an option and all debt is fully repaid at maturity. This is clearly not the case in China. Otherwise, the 1% non-performing loan (NPL) ratio of the formal banking system would be simply impossible to explain - not to mention the zero default record kept by China’s domestic bond market or by the vast numbers of low-return infrastructure LGFVs (…) the logical conclusion has to be that a non-negligible share of the corporate sector is not able to repay either principal or interest, which qualifies as Ponzi financing in a Minsky framework”

Hacer clic para expandir...

Teniendo en cuenta el nivel de jovenlandesesidad, que se encuentra en torno al 1%, la economista cree que solo existe una forma de explicarlo y es la refinanciación masiva de los riesgos asumidos. O lo que es lo mismo, “patada hacia delante” en la jerga española, o “delay and pray” y “kick the can down the road” en la anglosajona. ¿Qué ocurrirá con todos estos riesgos refinanciados cuando la economía no repunte sino que vaya a menos? He ahí el temor a un “Minksy moment” que se ha extendido por el mundo financiero. Y es que se nota que les falta un Ministro Guindos con la mano ligera firmando Decretos…

No solo en SocGen andan preocupados, Charlene Chu, hoy va de mujeres el artículo, Director Senior de entidades financieras en Fitch, también nos da datos para reflexionar. China ha aumentado sus activos en 5 años en un importe superior a los activos del sistema bancario de EEUU, según sus cálculos habrían aumentado 71 billones de yuanes de 2008 a 2012 y aumentarían en 20 billones más en 2013, lo que equivale a unos 14 – 15 billones de dólares, mientras que el balance del sistema bancario de EEUU es de 13,4 billones de dólares según la Reserva Federal. Y por si aun consiguen conciliar el sueño esta noche, hay más.

Estima el ratio de deuda total sobre PIB en un 198% sobre el PIB, siendo del 125% hace 4 años, esto es, 73 puntos porcentuales de aumento. Japón aumentó su deuda en 45 pp de 1985 a 1990, Corea en 47 pp de 1994 a 1998 : con unos ratios menos preocupantes ambos tuvieron importantes crisis. Chu concluye que “no hay forma de salir de un problema de deuda cuando ésta es el doble que el PIB y crece el doble de rápido” y advierte sobre la jovenlandesesidad, ya que en su opinión lo que está haciendo el sistema financiero es sacar de balance todo préstamo con algún problema de jovenlandesesidad empaquetados en los conocidos como Wealth Management Products (WMP), lo que podría explicar el escandaloso aumento del “Shadow Banking” en los últimos meses y augurar problemas futuros.

Pero tranquilidad, no pasa nada, el PIB crece menos pero todo está en calma… o eso dicen. Quizá sí, o quizá no, porque cosas raras sí empiezan a verse. La última semana ha sido el SHIBOR, el indicador del interbancario chino equivalente al Euribor o al Libor. Tradicionalmente los chinos en la antesala de ciertas festividades atesoran un importante nivel de cash, algo que explica que, esperando el “Dragon Boat Festival”, el Shibor haya subido. Sí, en parte lo explica, ¿pero lo explica totalmente?

Se muestra el Shibor en sus referencias overnight, a una semana, a dos, a un mes y a tres meses. Como puede observarse las presentes tensiones de liquidez del interbancario no son habituales aun teniendo en cuenta las festividades, de hecho según Reuters el viernes se habrían visto quotes del 15% en el ON. Podrían ser solo tensiones temporales como ha ocurrido en el pasado, pero hay rumores que dicen todo lo contrario. El PBOC puede eliminar las tensiones cuando quiera, pero aquí algo está pasando, algo como esto:

China Everbright Bank Co. failed to repay 6 billion yuan borrowed from Industrial Bank Co. on time yesterday because of tight liquidity conditions (…) Industrial Bank said market speculation that Everbright Bank failed to repay it more than 100 billion yuan was “untrue and exaggerated,”

Hacer clic para expandir...

Al parecer China Everbright Bank, un banco mediano, no habría podido satisfacer sus compromisos en el mercado repo, dejando sin pagar una cantidad que se estima en 6 mil millones de yuanes (unos 978 millones de dólares), pero que podría haber sido muy superior. Todo ello coincidente con un momento en el que el Gobierno Central se ha propuesto eliminar las entradas ilícitas de capitales en el país, que se realizaba alterando las declaraciones de lo que se exportaba e importaba. Esto ha llevado a que las cifras de exportación reduzcan su crecimiento de un +14,7% en abril a un +1% en mayo, por debajo de todas las previsiones y dejando en entredicho nuevamente sus cifras de PIB.

Así, obtenemos un país con un crecimiento de crédito desmesurado, cuyos activos bancarios crecen más en 5 años que todo el sistema bancario de EEUU, un país con una carga financiera sin parangón a nivel mundial, un país donde la jovenlandesesidad se oculta bien por refinanciaciones bien por colocaciones mediante WMP, donde una mínima tensión de liquidez se convierte en un efecto en cadena, y donde las estadísticas están totalmente falseadas; recordemos que China es el único país del mundo en donde todas sus provincias crecen por encima de la media. No sé qué opinaría Minsky al respecto pero, parecer, parece que se cumplen todos los requisitos. ¿Habrá "Minsky moment"?

Hacer clic para expandir...

Exclusive - EU to seek WTO ruling against Chinese steel duties: sources

By Ethan Bilby

BRUSSELS | Tue Jun 11, 2013 9:55am BST

(Reuters) - The European Union plans to lodge a case with the World Trade Organization against Chinese duties on specialised steel tubes, EU sources said on Tuesday, opening another front in a rapidly escalating trade conflict with Beijing.

The move will allow the EU to join a related complaint filed by Japan against Chinese duties in December.

The EU complaint would seek to overturn Chinese duties on exports of seamless stainless steel tubes made by firms such as Spain's Tubacex S.A and Germany's Salzgitter A.G, the sources said. The sources asked not to be identified because of the sensitivity of the case.

The filing, which may come as soon as Thursday or Friday, will send a signal to China that the EU is willing to take legal action against any duties it considers to be based on retaliation rather than objective evidence.

It ***ows China's decision last week to investigate alleged dumping of EU wine in apparent retaliation against the EU imposing provisional duties on Chinese solar panels, the biggest trade case the EU has launched.

WTO rules prevent members from levelling tit-for-tat sanctions, instead requiring proof assembled via a thorough investigation that a country's industry has suffered damage before any duties can be imposed.

The sources said the stainless steel case was separate from the dispute over solar panels and wine. Under WTO rules, the EU had a limited time to join the complaint filed by Japan.

In February, the EU won a similar WTO dispute against Chinese duties on X-ray scanners, with a settlement panel in Geneva agreeing the duties imposed by China had not been the result of a proper and thorough investigation.

One EU diplomat said victory in the X-ray scanners case, which was the first time Brussels had challenged Chinese trade defence measures before, emboldened the EU.

"The Commission is quite confident that retaliation by the Chinese is now recognised, so they think they have a good chance to win," the source said.

Another source said the European Commission, the EU's executive, will brief the Chinese on Thursday before opening the complaint on behalf of the EU, ahead of a meeting of EU trade ministers in Luxembourg on Friday.

The Commission's spokesman on trade issues was not immediately reachable for comment.

Japan is challenging the Chinese steel tube duties and how they were applied, alleging China did not have enough evidence and kept what it did have secret, shielding the companies who had complained.

Used in coal-fired power plants, the tubes are made in Japan by firms such as Nippon Steel & Sumitomo Metal Corp among others.

Japanese stainless steel tube exports to China were worth 5.8 billion yen (37.6 million pounds) in 2011. EU exports are estimated to be in the tens of millions of euros.

Hacer clic para expandir...

Fitch warns on risks from shadow banking in China

FRANKFURT | Mon Jun 10, 2013 12:56pm EDT

(Reuters) - China's unregulated shadow banking sector poses an increasing risk to the country's financial stability that could spread to other countries, credit rating agency Fitch said on Monday.

China has tens of thousands of non-bank lenders that are providing increasing amounts of credit to businesses and government outside the mainstream, regulated banking sector, a situation that is stoking systemic risk, Fitch said.

There is little visib1lity on where the money is going, who is lending it or what the credit quality of assets is, meaning traditional warning signs of trouble will not function properly.

"It is a wild west atmosphere in many respects and that is one of the reasons why we are so worried," Fitch Senior Director Charlene Chu told a conference in Frankfurt.

Regulators had little insight into the non-bank sector.

"It is a material risk because a growing amount of credit is being extended through channels that they don't have tras*parency or control over," Chu said.

Chinese authorities have been working to improve tras*parency in the financial sector, but Fitch said it was hard to get a handle on the problem, which hurts the effectiveness of monetary policy, will complicate the winding down of any institutions that fail and could also eventually put downward pressure on China's sovereign rating.

The country's bank regulator, the China Banking Regulatory Commission (CBRC), publishes statistics on non-performing loans, for example, but this is of limited use, Chu said.

"A 1 percent NPL ratio has little signaling value when 36 percent of all outstanding credit resides outside Chinese banks' loan portfolios," she said.

Banks are likely to be on the hook for bailing out non-banks in trouble, because the only efficient way to deal with shadow bank exposures is to tras*fer the risks to the formal banking sector, Chu said.

The country was already seeing defaults in trust and wealth management products that could be an early sign of trouble.

"Stress will appear in the weakest parts of the financial sector, which tend to be non-bank financial institutions on the fringe of the system - and gradually work its way inward," she predicted.

While there are some factors mitigating the situation, such as China's closed capital account, deep central bank reserves, the fact that funding is largely domestic and the main borrowers and banks are state-owned, there was still a potential for contagion, Chu said.

The foreign owners of stakes in Chinese banks already saw big writedowns on those stakes in the 2008 financial crisis and this could happen again, she pointed out.

There is also about $1 trillion in credit exposure by foreign banks to Chinese banks and corporations but this was also manageable.

"The bigger issue is what is it going to miccionan for growth and confidence, which could play out in a very negative way because China has been so important to the global growth story," she said.

Hacer clic para expandir...

Occupy Hong Kong group moves to allay antiestéticars of protest violence
By Asian Correspondent Jun 11, 2013 3:04PM UTC

By Nicholas Olczak

Organisers of Hong Kong’s Occupy Central movement are seeking to counter antiestéticars ***owing warnings that their planned civil disobedience action could become violent and would be damaging to the city’s businesses.

First proposed by Hong Kong University law professor Benny Tai Yiu-ting, Occupy Central is a plan to campaign for democracy in Hong Kong by holding a large-scale civil disobedience action blocking the roads of the city’s Central district in July 2014. Organisers have suggested that 10,000 protestors might be involved.

An anti-government protester carries a Hong Kong colonial flag blocking the main road in downtown, at Central on New Year's Day in Hong Kong. Pic: AP.

On June 9, several hundred Occupy Central supporters including pro-democracy lawmakers held the first of three planned deliberation days at Hong Kong University to discuss the direction the movement would take.

Hong Kong Chief Executive Leung Chun-yin warned that the civil disobedience action would not be tolerated by the government or the courts and said it was not possible that the protest could be conducted peacefully.

“Once the occupy action takes place … there will be no possibility of it being lawful or peaceful,” the South China Morning Post reports him as saying. “The government will not tolerate law-breaking activities.”

Ching Cheong, a veteran political commentator who attended the deliberation meeting, told media he was worried that the action could lead to violence similar to that which ended the demonstrations in Tiananmen Square in 1989. He said the People’s Liberation Army had recently conducted drills in Hong Kong, and so the central government could be ready to suppress protest.

Organisers of the Occupy Central movement responded to the warnings by saying they would make keeping the protests peaceful a priority.

They said they were seeking to develop a mechanism for deciding when the protests would be called to an end. Tai said that the organisers would discuss such a mechanism, along with other means of ensuring the occupation stayed non-violent, in the coming months.

“If there’s a real occupation, we will issue very good guidelines to our participants on how to ensure the action will be non-violent,” Tai told the South China Morning Post. Ensuring “that [each individual] must not only make sure [he or she] remained non-violent, but that they are also responsible for making sure other participants [don't get too agitated].”

In January 2010, a small number of those gathered outside Hong Kong’s legislative council to protest a proposed high-speed rail project scuffled with riot police wielding plastic shields and pepper spray in a rare example of a local protest turning more violent.

Major Hong Kong business groups have also expressed concern that the proposed civil disobedience action would hurt business. Last month, the Chinese General Chamber of Commerce and the Chinese Manufacturers’ Association of Hong Kong published newspaper statements saying they felt the disobedience would damage the local business environment.

“The damage that Occupy Central would do to our economy is beyond estimation,” one statement said. “The financial sector estimates that if the stock market is hamstrung the loss in tras*actions could amount to tens of billion dollars in one hour.”

The Heung Yee Kuk, an advisory body representing rural communities in Hong Kong, published an advert calling for the action to be abandoned and saying it threatened the city’s harmony and stability. Henry Cheng Kar-shun, chairman of New World Development chairman also criticised the plans.

“No matter what Occupy Central was aimed at and how would it make use of loopholes in the law, it is illegal,” he said. “And [it] will affect Hong Kong’s economic and financial order”.

Supporters of Occupy Central attending the June 9 deliberation session agreed to better promote the planned protest in order to counter these suggestions that it would hurt business. They said they would shift the protest’s emphasis to that of mass participation.

Hacer clic para expandir...