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China, Russia In Coal Pact

China, Russia In Coal Pact

September 7, 2010 (Chinavestor) China, the world's largest consumer of coal, will get more of the energy source from Russia in exchange for a $6 billion loan, according to the China Coal Transportation and Distribution Association. The association said Russia will boost coal shipments to China to at least 15 million metric tons annually in the next five years and more than 20 million tons in the following 20 years.

China has been looking to gain access to more coal as its domestic energy needs continue to swell. Yanzhou Coal (NYSE:YZC), China's fourth-largest coal producer, said it will pay $682.1 million to buy a majority stake in Mongolia's Inner Mongolia Haosheng Coal Mining.

China depends on coal to fuel 80% of its power plants. Imports from Russia surged 15-fold to 11.78 million tons in 2009, accounting for about 10% of total overseas purchases, according to Bloomberg News. Coal purchases from neighboring Russia cost an average of $87 a ton in 2009 compared with $111 a ton paid for cargoes from Australia, Bloomberg reported. China became a net importer of coal for the first time last year.

 

 
Knowledge base

The yuan weakens against the dollar!

The yuan weakens against the dollar!
September 2, 2010 (Erwan Mahe) Given the many reactions to yesterday's main Thaler's Corner story on the yuan's strange and highly under-reported depreciation against the dollar, I have decided to provide a bit more material on this important matter today. You will see that the hyper-links will bring you to some off-the-beaten-path sites, like Fibre2Fashion.com, but the stakes are high indeed in the textile industry.

But first a little graph, just updated with current forex data, tracing the new decline vis-à-vis the dollar and the yen. Is it really surprising to see a resurgence in the so-called appetite for risk today in the wake of better-than-expected PMI figures in China this morning?

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Knowledge base

S&P Says China Can Endure Slowdown

S&P Says China Can Endure Slowdown

August 26, 2010 (Chinavestor) Standard & Poor's sovereign-ratings committee said China's balance sheet is strong enough to handle even a dramatic decline in economic growth, adding that concerns over a real estate bubble and bad loans incurred by banks as a result of China's stimulus package during the global financial crisis are overdone.

The ratings agency said it expects China's GDP growth will remain in the high single digits. S&P rates China AA+ with a stable outlook. China's ability to withstand an economic downturn is crucial for the rest of Asia, because it has been driving growth in the region, according to the Wall Street Journal.

China recently surpassed Japan to become the second-largest economy in the world behind the U.S. S&P has a bleak outlook, saying the country's economic growth outlook remains "tepid." S&P has a rating of AA on Japan with a negative outlook.

Asia-Pacific governments have emerged from the global crisis with their finances in good condition, having learned lessons from the 1997 financial crisis, the Journal reported, citing S&P.

Knowledge base

JPMorgan Lowers China GDP Forecast

JPMorgan Lowers China GDP Forecast

August 20, 2010 (Chinavestor) JPMorgan Chase (NYSE:JPM), the second-largest U.S. bank by assets, lowered its 2010 GDP forecast for China to 9.8% from a previous estimate of 10% because the U.S. and global economic recoveries appear to be "losing momentum" as the bank put it. The bank also lowered its 2011 growth outlook.

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Knowledge base

China Likes Euro, Yen; Dollar Not So Much

China Likes Euro, Yen; Dollar Not So Much

August 16, 2010 (Chinavestor) Sitting on $2.45 trillion in foreign currency reserves, the world's largest stockpile of cash, China has been buying Euro-denominated bonds and upping its holdings of Japanese bonds as well. Last week, Japan's finance ministry said China bought $20.1 billion more in Yen-backed bonds than it sold in the first six months of this year.

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