China has their own steel, iron, copper pits and mills but a lot ofthem are losing money on this so they are using Australia for most of the imports of Coal/Iron ore. China was hyped up to expectations like the tech bubble and now people realize that 8.0+ GDP is not the norm anymore (unless your an economist) so the parties that supplement China growth will see less work for now. Australia is a beast of its own instead of looking at the relationship of CHINA/AUSTRALIA and their Import/Export relationship I look at Australia separately. They have a structural problem with their Mining/Banking sectors feeding off one another and the credit offered and the lending practices are getting looser and looser as revenue margins come down.
China's stimulus has not fully gone out yet but if the new party just like in 2008 puts that money to work in development like housing it will be good money going after bad again.
There is a two part problem in China going on the first half is trying to cover the non performing loans and keep credit freely available to these developers so they won't default, and the second half is trying to put this money to work in infrastructure to appease the people and more importantly the marketplace. The black hole of non performing loans and SPV loans that has been issued by china in massive amounts (off the books) is comparable to The derivatives black hole of contracts that are being rolled over so that the losses can still be unrealized and fully hedged. This will all blow up soon the question is where will the first shoe drop.
China's stimulus has not fully gone out yet but if the new party just like in 2008 puts that money to work in development like housing it will be good money going after bad again.
There is a two part problem in China going on the first half is trying to cover the non performing loans and keep credit freely available to these developers so they won't default, and the second half is trying to put this money to work in infrastructure to appease the people and more importantly the marketplace. The black hole of non performing loans and SPV loans that has been issued by china in massive amounts (off the books) is comparable to The derivatives black hole of contracts that are being rolled over so that the losses can still be unrealized and fully hedged. This will all blow up soon the question is where will the first shoe drop.