A pair of worrying headlines. Insulated from much of the financial turmoil in Europe we may be in Australia but problems in China are of a more troubling kind. And this pair of headlines this morning sound an alarm:
Both the China Daily and the Wall Street Journal stories tell of purchses of shares in Chinese banks by China’s sovereign wealth fund, although the slant is somewhat different. The Chinese version has a policy signal to help prop up the domestic market and help restore investor confidence. The voice of American capitalism tells of “a loss of trust in the integrity of government statistics and corporate earnings.”
Another sign that things are getting tougher in China is the increasingly strong language being used in Beijing about the proposal before Congress to penalise Chinese imports if the yuan is not revalued. That was the China Daily’s lead story today …
Showing Australia the way. My eagle-eyed colleague Glenn Dyer spotted this on the Xinhua website this morning: “China introduces nationwide resource tax, adjusts rate.”
“The State Council, or China’s cabinet, announced on Monday it will tax all resource products starting Nov. 1, extending the resource tax on domestic sales of crude oil and natural gas from some regions to the entire country.
“The list of taxable resources widened from crude oil and natural gas to coal, rare earth, salt and metal from Nov. 1, according to the country’s revised resource tax regulations.
“The expansion of the resource tax is part of China’s efforts to encourage energy conservancy and limit environmental damage.”
Note the last sentence. This is being promoted by China as part of a program to encourage try and control energy consumption and pollution.
Hmmm and Dick Warburton and his trained naysayers in Australian manufacturing, plus Nobel prize laureate, Joe Hockey (along with Tony Abbott, founder of the Hockeynomics school of denying the obvious) claim that China is doing nothing to limit carbon emissions. It is, but like Australia, has a long way to go, but I suppose when you have a centrally-run economy extending a resource tax and using it to try and influence energy consumption is easier than having to do it in Australia.
The move to service. The Australian Bureau of Statistics takes a look this morning at 50 years of change in the Australian Labour force. Among the fascinating changes highlighted in this one:
Lobbying for results. A revealing little graph from The Economist illustrating how an index based on the amount of lobbying that American firms do has outperformed the broader market. In aggregate the results have been stunning, the index shows, comparable to the returns of the most blistering hedge fund …