China’s manufacturing sector has experienced a drop for the first time in three years, largely because of lower export demand from both Europe and the US.
This has prompted a monetary stimulus policy in China, and–at the same time–many banks internationally are providing stimulus as well, propping-up stock markets everywhere.
The emergency move by the U.S. Federal Reserve, the European Central Bank, and the central banks of Japan, Britain, Canada and Switzerland recalled coordinated action to stabilize global markets in the 2008 financial crisis after the collapse of Lehman Brothers.
In Italy, now the focal point of the euro debt crisis, the Treasury started emergency cash tenders for banks which have been squeezed particularly hard as Rome’s borrowing costs have soared towards 8 percent, a level seen as unaffordable in the long term.
The euro and European shares surged on the central bank action, which came after euro zone finance ministers agreed to ramp up the firepower of their bailout fund but acknowledged they may have to turn to the International Monetary Fund for more help.
These actions will lower the cost of borrowing, and that will be welcome both by deficit spending governments and industry, but for long-term help, there must also be a willingness to borrow and spend.
There may be a factor here that is not being given enough attention. We are in a world where we have experienced a great deal of new investment and consumer spending on personal computers, mobile phones, and the growth of new industries spawned by those technologies. It is natural that at the tail-end of those developments we will witness less investment spending and a slow-down in consumption.
Finally finished with internal assessment and predicted grades, I have the chance to get back to blogging with a continuation of the last post. Today’s story mentions China as a likely choice to build a high speed railway linking LA and San Francisco.
China has already begun building high-speed rail routes in Turkey, Venezuela and Saudi Arabia. It is looking for opportunities in seven other countries, notably a route sought by the Brazilian government between São Paulo and Rio de Janeiro, Mr. Zheng said.
International rail experts say that China has mastered the art of building high-speed rail lines quickly and inexpensively.
“These guys are engineering driven — they know how to build fast, build cheaply and do a good job,” said John Scales, the lead transport specialist in the Beijing office of the World Bank.
The California rail authority plans to spend $43 billion to build a 465-mile route from San Francisco to Los Angeles and on to Anaheim that is supposed to open in 2020.
California is ready to spend the money, and China–somehow–has quickly become a leader in the ability to build these things. This is a little surprising to me, as I am still hearing from friends that workers here lack innovation, and the cost-cutting mentality would seem to pose dangers for these high-tech projects.
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Surprised to see this headline–China Emerges as a Leader in Cleaner Coal Technology–but it explains something I have noticed here in Suzhou. My first year here, three years ago, it was rare to see a blue sky. I think it was only two or three days during the entire school year. Last year the air began to clear and it was more common to see blue skies and even an occasional star in the night sky. This year the air has been unusally clear, and perhaps a majority of days we can see a blue sky.
My friends have said it is because the rate of construction has died down a bit. Maybe it is a factor but I am happy to give China credit for developing the clean technology.
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