Tag Archive | china

Global Economy

Economy Update

Economy Update

The Australia RBA has reviewed their cash rate in view of the slowing economy. It is now becoming apparent that this country has mismanaged its biggest resources investment boom in decades and is now potentially looking towards a new government to change this situation.

China’s weak data has been a concern to the markets and a reduction in projected growth is forecast for this year. China’s reduced projected demand of coal and iron ore is directly affecting the Australian markets. However, business confidence still remains unchanged in a recent BNZ Business Confidence survey in New Zealand.

This is having a positive flow on effect on migrant flow between NZ and Australia reducing NZ net loss significantly over the last months of data. The net loss a year ago was 39,622, while the current net loss is 32,862.

India to overtake China?

I read a very interesting treatise last evening where the economies of China and India were compared and some predictions offered. No need to rabbit on; put simply, everything the Chinese make they export. Almost all that the Indians manufacture is consumed at home.

China and India compared

So? Well, Chine relies on other nations’ consumption and as 60% of what they make goes to USA and they’ve stopped spending, as has Europe, their economy is rushing sideways and in some sectors, backwards. Not good news for the Aussies and other selling raw materials to them. Still good for NZ though, as the huge demand for food in China has outstripped their ability to produce.

India though is different; what they make they consume internally. In fact, demand for almost everything you might imagine is such that import pressure is constant. Again, some NZ food products and byproducts.

The author of the article conjetcured that the Indian manufacturing and IT sectors could well become world dominant within three years while China would slow and stagger. NZ, he felt, and this was an Aussie writing, would do just fine. Nice.