Hubert Fromlet: Outlook for China 2010 / 2011
17 Feb 2010 | Posted By: JIBS Stories
Summary
# Looking at Chinese statistics and recent developments – without considering statistical quality at this point – leads to the (current) conclusion that China has managed the global financial economic crisis quite well. However, good economic growth was maintained by massive injections of fiscal stimuli and incredibly easy monetary conditions for new credits. Of course, these enormous injections into the economy now lead to concerns about the quality of new loans, of new investments and future inflation. Around 60 per cent of the big stimuli package has gone – or is about to go – to state-owned companies. This tells us quite a bit about future risks for the banks and the economy as a whole.
Current cautious measures to reduce the rapid rate at which new loans are granted are not a wise precautionary step to dampen speculation and overheating – as it has been said in many comments – but rather an attempt to minimize damage after last year’s Formula 1 speed.
# New own China Survey (Feb, prel, final results after New Year’s vacation):
Overheating indicator: 8.4 (peak since its start in fall 2004, Â Mar 2009:3.9).
Forecast GDP growth 2010: 9.4 percent    2011: 9.0 percent.
# Still, my own main scenario – which I made before the panel survey – is that China will achieve quite a good GDP growth in 2010, in the range of 9-9 ½% percent, despite more tightening of credit conditions and uncertain global conditions. Two interest rate hikes by totally 0.54 percentage points are implemented in this rate forecast. This is not a very scary tightening (however, it could turn out to be somewhat more than this). In all: The risks for this year’s development should not be neglected, particularly when it comes to inflation. There is a non-negligible probability that inflation will exceed the unofficial “comfort ceiling” of 4 percent.
# More skepticism should be applied to 2011 – unless the global economy recovers more rapidly than currently expected. Next year, fiscal emergency stimuli will run out, credit conditions will be tighter, and the Chinese currency may return to its previous state of appreciating cautiously. Many imbalances will be – or remain – in place next year, too. For this reason, a somewhat lower range for Chinese GDP growth seems to be appropriate in 2011, around 8 ½ – 9 ¼ percent.
A warning may well be in order: China (risk) forecasts should be prepared more carefully than in the past. Following the herd is not good enough anymore.
Read the full post at Professor Fromlet’s blog
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National Conference held at the School of Education and Communication
10 Feb 2010 | Posted By: JIBS Stories
On the 4th and 5th of February, the National Conference (Nationella konferensen) was held for the first time at the School of Education and Communication in Jönköping. The conference focuses on female entrepreneurship and how to help women get into the business sector, which today is mostly controlled by men. Those who participated had the opportunity to listen to lectures and attend different seminars.
One of the lecturers was former Swedish politician Ulrica Messing who has been in the government for many years. She held a lecture about not being afraid of starting your own business.
The conference was organized by Jönköping University, the Swedish Board if Agriculture and Nätet – a resource centre for women. Siv LindĂ©n is the director of Nätet:
- I’m happy that it’s all going so well, and that over 180 people from all over Sweden are here. This is the first time a conference of this kind is arranged and I think it’s a great opportunity for women to be seen as entrepreneurs, said Siv Lindén.
Cecila Bjursell and Leif Melin from CeFEO – Centre for Family Enterprise and Ownership at Jönköping International Business School – held a lecture about family businesses.
- The women are raised to take care of the family and the men are raised to run the family company. Most famly companies only let the sons take over as CEO, said the researchers.
Rhetoric consultant Elaine Bergqvist, author of the book Härskarteknik (master suppression techniques), held a lecture about how to become a better speaker. According to Elaine, rhetoric is not the art of speaking: it’s about getting people to listen. She had a tip to students about rhetoric:
- Ignore the people who think you don’t have enough experience because you’re too young. Barack Obamas’ rhetoric consultant is only 28 years old.
National Conference Video (only in Swedish)
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