2017

24 Mar, 2017 In 2016 Australian coal and iron ore miners enjoyed a jump in commodity prices thanks to capacity closures mandated by the Chinese government. Prices have since pulled back from their peaks, and companies such as BHP and Fortescue have warned that the current level of prices cannot be sustained. We provide an overview of why the Chinese government has been shutting down coal-fired power stations, and explain why commodity prices will fall back again... [read more]

31 Jan, 2017 According to the traditional Chinese calendar, on Saturday 28 January the Year of the Monkey gave way to the Year of the Rooster. Last year started badly and ended well. We think that this year will do the opposite. A slowdown in the Chinese economy remains, as ever, the single biggest risk for the Australian economy. We have often stated that Chinese GDP growth is slowing over the long term because the structure of the Chinese economy is changing – services now outweigh manufacturing industry as a percentage of GDP, state sponsored capex is declining, and labour [...]

23 Jan, 2017 After achieving GDP growth of a scientifically-precise 6.7% in each the first three quarters of 2016, China recorded 6.8% in the December quarter, making 6.7% for the calendar year. This outcome was squarely in the middle of the official target range of 6.5% to 7.0% for GDP growth under the Thirteenth Five Year Plan (covering 2016 to 2020). There is a widely held opinion that Chinese statisticians work more magic than Harry Potter. Back in 2007, the current Premier Li Keqiang remarked that he avoided official statistics and preferred to look at underlying data such as electricity consumption [...]

9 Jan, 2017 One of the many paradoxes of the Trump presidency is that, although he is one of the richest men ever to be elected president, he was elected by “the little guy”.  The opposite of being rich is being poor. Trump was not elected by poor people on average, but by poor areas of the USA. What do we mean by saying this? ...[read more]