The fourth consecutive monthly rise in German unemployment hints that the gap between the euro zone’s core and its periphery might be slowly closing. Some 21,000 more workers went jobless in May (pdf), in seasonally adjusted terms—four times more than economists expected, based on Bloomberg estimates.
Sick of the bad China news? Here’s a little silver lining for you. Officials in the National Development and Reform Commission, the body that’s responsible for drawing up urbanization plans, just proposed some measures that could help end China’s cycle of local government debt and cool its property market (link in Chinese).
The Chinese government may finally be reining in the use of wealth management products (WMPs), the risky investment vehicles that held some $1.2 trillion in assets (largely households) at the end of 2012. China Real Time reports that banks issued 8.8% fewer WMPs in April compared with March, after the government cracked down on bank issuances.
Chinese tourists are making their mark on the global tourism industry—literally. The picture above is a relief etched 3,500 years ago in Egypt’s Luxor Temple in Egypt. More recently, someone added the characters “Ding Jinhao was here,” as documented by an ashamed Chinese traveler who posted his photo to Sina Weibo (registration required). “We want to wipe off the marking with a towel,” the traveler wrote. “But we can’t use water since it is a 3,500 year-old relic.”
Abenomics, as the economic policies of prime minister Shinzo Abe are known, might be facing its first real roadblock. Minutes from the April 26 Bank of Japan (BoJ) policy meeting show that “a few members” worried that markets would find the purchase of government bonds and the focus on creating inflation to be “contradictory” (pdf, p.9); one worried about continued “instability.”
The decline in European fortunes has kept the continent’s tourists pinching pennies. That’s made it hard for Club Méditerranée, a French resort company known originally for its cheap and cheerful beach vacations, to boost profits by turning its beach hut clusters into luxury resorts. To offset the fall in European spending, Club Med has been courting upscale Chinese tourists. A takeover bid from AXA Private Equity and Fosun International Ltd (paywall), a massive Chinese conglomerate, looks like a vote of confidence in that strategy.
The Chinese government is getting serious about ending the state’s parasitic role in the Chinese economy, reports the New York Times.
Earlier today, European Central Bank commissioner Ewald Nowotny warned that the euro zone recession in 2013 could be even worse than the -0.1% growth expected. A slew of preliminary data from this month’s Purchasing Managers Index data, which measures business activity, suggest Nowotny’s right.
China Galaxy Securities Co., which is majority owned by one of China’s sovereign wealth funds, raised $1.07 billion in its Hong Kong IPO today—capital that will go toward building up its margin financing and securities lending businesses, its core money-spinners.
China has $3.4 trillion in foreign currency reserves, and they appear to be burning a hole in the central bank’s proverbial pocket. Or at least that’s what you might conclude from the fact that the State Administration of Foreign Exchange (SAFE), the steward of China’s foreign reserves, just quietly opened a new office in New York.
The latest in China’s rolling cascade of food safety disasters comes from Guangzhou—the capital of Guangdong province in southern China, and one of China’s largest cities—where 44% of rice samples were found to contain poisonous levels of cadmium (link in Chinese). That rice was being served to unsuspecting diners in restaurants around Guangzhou (link in Chinese).
The Japanese economy is on the mend, said the Cabinet Office earlier today, in its first upgrade of the economic assessment in two months. Specifically, private consumption, exports, industrial production and corporate profits among large firms are all “picking up.”
In the US, hyper awareness of breast cancer could be prompting too many preventive operations. China has the opposite problem: women don’t know enough, or do enough, to fight the disease.
This post has been updated.
It was in most respects a typical heist that happened in Dublin last month. Masked men, roughed-up security guards, $650,000 in stolen booty. But this wasn’t art or jewelry that was stolen. The contraband, instead, was four rhinoceros heads. Or, more specifically, their horns.
China’s National Bureau of Statistics just announced that Chinese investors bought 30.3 billion yuan ($4.93 billion) worth of gold and silver jewelry sales (link in Chinese) in April, 72% more than than in April of 2012. For anyone but goldbugs, this piles on a couple more reasons to worry about the Chinese economy.
Industrial output, a key driver of Chinese economic growth, was up 9.3% in April, versus the same month of 2012—higher than the seven-month low of 8.9% seen in March, but slightly below expectations. The data suggests concerns about China’s slowdown will continue through the second quarter. Research firm IHS Global Insight emphasized that the data still look gloomy. ‘’This is not the start of a rally, it is a sputtering whimper as momentum continues to fade,’’ wrote IHS’s Xianfang Ren and Alistair Thornton. Here’s a look at the data. (Note: There are somewhat strange gaps in the data tied to Lunar New Year holiday. Those gaps drive drive economists nuts.
Malaysian budget airline AirAsia X, the long-haul arm of parent company AirAsia, plans to raise $300 million in an IPO on the Malaysian exchange to fund expansion of its routes throughout Asia and pay off debt. The company had scrapped plans to list in the first quarter of this year, postponing those due to the upcoming Malaysian elections and to global volatility. The IPO is scheduled for July 10; the Malaysian exchange is now trading at an all-time high.
For around a year now, the Chinese government has been trying to curb “shadow banking,” as lending to local government investment proxies and other insolvent vehicles through difficult-to-trace channels is known. Shadow banking is now thought to be as big as 36 trillion yuan ($5.8 trillion), according to JP Morgan.
A slew of Japanese companies announced earnings today, including Nissan, Panasonic, Hitachi and Nippon Steel & Sumimoto Metal. Here’s a roundup of how Abenomics—the country’s aggressive monetary easing policy that has led to a sharp drop in the value of the yen—affected their performance:
UK factories are finally humming again, as manufacturing production rose 1.1% in March from February (pdf), said the Office for National Statistics. The data blew way past expectations for 0.2% growth.
China’s consumer inflation slowly but surely ticked up in April, rising 2.4% from April in 2012, compared with a 2.1% year-on-year increase in March. That was more than expectations, but still far from the 3.5% or more that would prompt government action. Food prices were even higher in April, coming in at 4%—one of the biggest concerns for the government.
As Americans carefully separate the paper and plastics from their trash, most probably don’t realize that their country doesn’t recycle stuff so much as export it to be recycled elsewhere. Specifically, to China. For more than five years, scrap and trash has consistently been the US’s biggest export (paywall), for which China is the number one customer, and the market has doubled in size since 2006.
Earlier today, the Beijing Public Security Bureau reported that “non-Beijing residents” were gathering in Fengtai District, in southwest Beijing, to “reflect discontent” with the May 3 death of a woman who had allegedly been gang raped (link in Chinese). The death of the woman in question, a 22-year-old worker from Anhui province, occurred hours after she was allegedly gang raped by security guards; authorities determined that there were “no suspicious circumstances” (link in Chinese).
