Spring is here, dear readers, tra-la, tra-la. The bosoms of China traders, analysts, business people and consumers alike swell with revived optimism after a particularly chilly winter of discontent and negativity with regard to the China miracle. The naysayers have been rocked back on the heels by sunshine and a few pieces of news that suggests revival. That’s not to say the bah-humbug crew weren’t also provided over the week with material to bolster their view; they were.
And so the endless debate over the state of China’s economy and system continues with little transparency on the machine and only partial views of the consequences. It is a situation reminiscent of Plato’s “Allegory of the Cave”. We won’t go into too much detail, although for an excellent recitation of the key sections, try John Malcovich on Dweezil Zappa’s latest album. But in brief, the allegory involves people who are constrained in such a way that their view of reality is not only distorted, but they also have no reason not to believe that what they see is reality. The people in the allegory are chained in a cave watching shadows on the wall opposite them. Are we, dear readers, perhaps chained in front of computer screens watching the same shadows, now rendered in the shapes of the skylines of China’s cities, in statistics and stock exchange indices? Who knows? But we believe sincerely that the reality of China is absolutely real and will remain so until the moment it isn’t.
But back to the news. We had March trade data released, and exports were reported up after a weak February, which encouraged many people, including investors on overseas stock markets who fear the consequences of a China recession – to what degree unnecessarily is a question for another week. Imports were up solidly too, so there was some celebrating and the Shanghai stock exchange lurched back into the 3,000s. There is certainly a general sense of greater stability in terms of the overall Chinese economy when compared to the last quarter of 2015, and the first months of this year.
But a foreign optimist to whom we spoke this week, predicted the RMB would end the year at 6.8, which will not discourage capital flight. And an excellent piece in the Wall Street Journal made the case that the new data is overall only positive superficially, and the deeper indications on corporate borrowing, spending and hiring suggest a continued slowing of the great machine.
But it is all just shadows on the wall? Have a great weekend.
Applications open for the 6th British Business Awards
The 6th British Business Awards launched on Thursday, April 14 in Shanghai and is now welcoming applications. Companies from the UK (or generally perceived to be British) operating in China, as well as Chinese investors in the UK are eligible. This edition of the awards features eight categories. For more information or to apply, visit:http://www.britishbusinessawards.cn/.