Posts tagged 'urbanisation'

The rapid march towards urbanisation

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Aug 30 2012 14:09 | Comment |

In our first post in this series, we examined the widely-held belief that China’s steel demand will continue to rise at a rapid rate. FT Alphaville, along with others, contend that such forecasts are on shaky ground. This is, in part, because of the dubiousness of one of the underlying assumptions: that China will rapidly urbanise more of its population. (Here’s a very recent example of this argument, from Stephen Roach.)

The proportion Chinese living in urban areas just passed the 50 per cent mark in the past year but, the story goes, there is more to come. This will in turn mean more industrialisation, more modernisation, a bigger and consuming middle class and of course more GDP growth. In other words: Read more

The ever-increasing hunger for steel

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Aug 30 2012 11:04 | Comment |

It used to be an accepted fact that China’s appetite for steel and steel’s main ingredients — primarily coking coal and iron ore — would continue to rise sharply, not just in absolute terms but at an accelerated pace.

Annual steel consumption had been expected to rise from 2011′s 680m-plus metric tonnes to 1bn metric tonnes by 2020. This forecast has been a mainstay of many China-related predictions for some time, particularly in the mining sector. It was still being cited by BHP Billiton in March, even while the miner’s head of iron ore surprised many with a bearish tone. Since then, however, the world’s two biggest miners began to back away from it and this month Rio Tinto is talking about 1bn tonnes of steel by 2030 — a hazily far-off date. Read more

Two Chinese infrastructure problems

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Jul 23 2012 13:21 | Comment |

It’s not just excessive investment, particularly the fixed-asset sort, that’s a problem in China. It’s the wrong kind of investment that is the issue — projects that are simply uneconomic.

Exhibit 1: a somewhat ambitious airport-building programme, which is vexxing Gordon Chang: Read more

How China can keep urbanising with flat steel demand

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Jun 14 2012 09:05 | Comment |

Even if you don’t buy the once-popular assertion that China needs more of just about everything to meet its growing economy, zero growth in steel consumption might seem pessimistic, given that rural Chinese are still moving to cities in large numbers.

Nomura analysts Matthew Cross and Ivan Lee looked at China’s urbanisation rate and concluded that it can keep progressing at its current pace for years without needing an increased rate of steel consumption. In fact, they argue that China’s annual steel needs won’t increase at all in 2012 and 2013 — and that’s with new government stimulus. Read more

Willem Buiter thinks water will be bigger than oil

Tracy Alloway used to be deputy editor of FT Alphaville. Here she learned the details of derivatives, the absurdities of accounting and the various structures of ... erm ... structured finance. She now covers big US banks for the FT paper, including Goldman Sachs and Morgan Stanley. She pops up on FT Alphaville every once in a while.

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| Jul 21 2011 09:38 | Comment |

FT Alphaville reports that Citigroup’s global strategists are recommending investors play the urbanisation trend by buying into water companies, arguing that the concentration of the world’s population and increasing standards of life will drive up demand for the liquid commodity. Even Willem Buiter, Citigroup’s chief economist, a man most often seen railing at the vagaries of central banks, has got stuck in with a 4,000-word essay on the subject. “I see fleets of water tankers (single-hulled!) and storage facilities that will dwarf those we currently have for oil, natural gas and LNG,” he writes. Read more

Behold the new economic super-cycle

| Nov 15 2010 17:39 | Comment |

Remember the economic super-cycle?

Well, it never really went away. At least not according to Standard Chartered, which has just published a huge report on the world economy and the decades of strong growth that lie ahead. Read more