Wednesday, July 13, 2016

EU Warns China on Steel Dumping

While China cuts back on steel production, it is selling some of the excess at a loss in Europe, pushing steel prices there down 30 percent this year. The EU has warned of tariffs and other measures in response. This suggests that China’s planned cuts in steel production may not go far enough or may not be happening fast enough to adjust to a global decline in demand for steel.

Saturday, July 9, 2016

As Seen From China, a “Grim” World

While there are notes of caution about the global economy from various sources, only China seems to view the world through the lens of of an economic depression. Note the comparative language in this Reuters story on the G20 meeting:

Given China’s world-leading position in manufacturing, the difference in perspective makes sense if the manufacturing sector is going into a multi-year decline globally. The transition away from manufactured goods would create challenges in many places, but would pose the threat of a depression only in a country as heavily invested in manufacturing as China is.

Tuesday, July 5, 2016

Don’t Look Now, But the Yuan Is Down

The yuan, which briefly stabilized last month while the British pound was declining, is falling again, down another 1 percent against the U.S. dollar in the last two weeks after declining 2 percent in the previous two months. Many currencies are declining as investors move funds into dollars, perceived as a low-risk currency during shaky times. The distraction of Britain might also be taking away some of the pressure on China to support its currency while the news is focused abroad.