Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: China and Germany unite to impose global deflation
You may have heard of Chimerica or Chindia, notes the FT columnist. Let me introduce you to Chermany, a composite of the world’s biggest net exporters: China, with a forecast current account surplus of $291bn this year and Germany, with a forecast surplus of $187bn.
Takatoshi Ito: China’s property bubble is worse than it looks
The Chinese official statistics say that the average rise in property prices was 10.7 per cent in February. The increase is accelerating from a year-on-year rise of 9.5 per cent in January. However, the data may significantly underestimate what is going on for prime properties in China, says the professor of economics at the University of Tokyo.
Market Insight: Mike Dicks – Is Italy the real joker in the eurozone pack?
Recently, the German Chancellor, Angela Merkel, asked why Germany might be expected to support Greece, when Greek workers can, and do, retire earlier than their German counterparts, says Dicks, chief economist at Barclays Wealth. I wonder what she might say if Italy was under the cosh? After all, Italians retire on average at the age of 60.8 years – almost one year earlier, on average, than the Greeks!
News analysis: Oil traders look to James Bond-style data collection
Twice a week a helicopter pilot lifts off from a remote Oklahoma airport, circles several times and returns with images as important to oil traders as celebrity spreads are to magazine editors. Cameras bolted to the aircraft shoot photos and video of the oil tanks at Cushing, the US pipeline hub that plays a central role in the oil market as the delivery point for West Texas Intermediate oil futures, the global benchmark.
Analysis: South Korea – into position
South Korea is putting history behind it. It is not only one of the countries rising fastest out of the downturn but could also find itself as a diplomatic leader trying to resolve one of the year’s most intractable disputes: Beijing’s clash with Washington over the value of the Chinese currency. Crucially, it is a country that knows how to talk both to China, its biggest trading partner, and the US, its main military ally.
Brussels: When a Greek rescue plan is not a rescue plan, after all
The financial rescue plan devised by eurozone governments for Greece doesn’t look like a rescue plan in the classic sense. Like a thermonuclear weapon, it appears intended never to be used at all.
Money Supply: A Fed dissent by any other name
What’s in a dissent? Quite a lot, potentially. Thomas Hoenig, the notoriously hawkish president of the Kansas City Federal Reserve Bank, had already disagreed at the last FOMC meeting on the reference to an “extended period” of low interest rates – saying the economy was strong enough that higher rates could be contemplated at some point sooner. Mr Hoenig disagreed again with his colleagues on Tuesday, but elaborated on his reasons for doing so.
Lex on currency wars: US vs China
Beijing was asking for it. On Friday a central bank official invited the US to refrain from “politicising” China’s currency policy. On Sunday, closing the annual meeting of lawmakers, Premier Wen did little else, with a series of pointed allusions to the “Three Ts” dominating the two nations’ relationship: Taiwan, Tibet and the trade surplus.