Monday, October 1, 2007

Is China Going to Own the World?

Two stories that caught my eye last week.
First on China's Strategic Pork Reserve:

The past couple of weeks have been illuminating for anyone who wanted to know just how challenging the complex problems that China faces are.
The often-sycophantic, financial Western press always seems intent on trying to infer that China is aiming to develop its society as a mirror image of the Western democracies.

...Predictably, it has frozen some state- controlled prices while it has been releasing meat from what is probably the world's only "strategic pork reserve."

In addition to these moves, it has returned to its usual interventionist practice of trying to hand out additional incentives so as to encourage farmers to raise more pigs and get them to market.
Although commentators in the market point to rising feed costs as a component in the increased cost of pork, this would not seem to be rational. In the first half of the year farmers actually stopped breeding pigs as disease swept through the industry.
From The Standard (HK)

And From CNN Money:

China's central bank hikes mortgage rates
People's Bank of China also raises required downpayment in effort to cool rising property prices and deter speculators.

Seems a bit more proactive than some central banks.