In this briefing:
- US Dollar Demand – Fading Appetite
- Confluence of Politics – China Bans Australian Coal Imports (Flash Note)
- The Internet: Hacks, Clicks, and Money
- China’s Pharmaceutical and TCM Industry
- ECB, BoJ Suck Wind – EA Threatened with Japanisation
1. US Dollar Demand – Fading Appetite
In 2011 the world experienced the best year of demand expansion – in US dollar terms – in any year since the financial crisis, until 2018 that is. But you would hardly realise that that was the case by reading the newswires, the stories there since early 2018 have been about ‘synchronised slowdown’ and, in particular, the demand downdraft from China. The reality is that developed countries (the US, EU, UK and Japan) plus developing Asia (China, India and the Asean-4) produced US$4.1trn of ‘new’ GDP demand in 2011 and in 2018 was on course to produce US$4.1trn in new dollar demand.
2. Confluence of Politics – China Bans Australian Coal Imports (Flash Note)
- China implements coal import caps specifically targeting Australian producers
- Unclear as to how widespread these restrictions will eventually be
- Thermal and metallurgical coal exports affected
- Impacting ~A$8.4Bn of metallurgical coal exports; or 4.4% of national income
- Thermal coal exports affected worth ~A$3.8Bn; or an additional 2% of national income
- Collectively, thermal and metallurgical exports equate to ~0.9% of Australian annual GDP
- Actions appear to be a response to blocking Huawei bidding for the 5G network
- Recent Chinese cyber-attacks harden Australian Government’s resolve
- Expect similar Chinese measures (in time) to be applied to other commodities and industries
3. The Internet: Hacks, Clicks, and Money
There is this thing called the internet that can be pretty cool sometimes. In all seriousness though, the internet is a driving force for making money and spending money. Last week we took a long look at mobile phones and continuing a deep dive on technology today we take look at the internet in China. This will not be a total encyclopedia but a snap shot of some key features.
4. China’s Pharmaceutical and TCM Industry
Chinese healthcare is fascinating in that one minute you can visit a doctor practicing the latest modern medicine and then stop at the corner store for traditional Chinese medicines specializing in random herbs and fungi. The dichotomy is a truly Chinese experience. However, China is increasingly a manufacturing and therefore export destination for both modern and traditional Chinese medicines (TCM).
5. ECB, BoJ Suck Wind – EA Threatened with Japanisation
By Charles Dumas, Chief Economist
- Monetary stimulus fails export-dependent savings glut countries
- Japan now accepts huge budget deficits and negative interest rates
- EA needs broad structural reform to avoid Japan’s deep malaise
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