From the Bloomberg:
http://noir.bloomberg.com/apps/news?pid=20601089&sid=a0oK9Fpz4YC0
China raised its benchmark lending and deposit rates for the first time since 2007 after inflation accelerated to the fastest pace in 22 months. The one-year deposit rate will increase to 2.5 percent from 2.25 percent, effective tomorrow, the People’s Bank of China said on its website today. The lending rate will increase to 5.56 percent from 5.31 percent, it said.
China’s inflation quickened to 3.5 percent in August, highlighting overheating risks that have prompted the government to curb credit and clamp down on the real-estate market this year. Higher interest rates may encourage inflows of speculative capital from abroad, complicating management of the fastest-growing major economy.
News about the Chinese rare earth mineral blockade:
http://www.nytimes.com/2010/10/19/business/global/19mineral.html?_r=1&ref=business
China mines 95 percent of the world’s rare earths. They are crucial for compact fluorescent light bulbs, hybrid gasoline-electric cars, large wind turbines and other clean energy technologies, as well as for mobile phones and a number of military applications, like missiles, sonar and range finders on tanks.
…
Wang Caifeng, the secretary general of the Chinese Rare Earths Industry Association, predicted at the conference in Xiamen on Tuesday that domestic demand for rare earths in China would soar to 130,000 tons in 2015 from 75,000 tons now, Bloomberg reported. She said that world consumption would be 210,000 tons in 2015, which would seem to indicate that consumption outside China would total 80,000 tons.
By comparison, the export quotas for this year total just 30,258 tons, down from 65,609 tons in 2005.
If China mines the 95% of all of the rare minerals, then the world using only the 22% of all of the production !
The remaining 78% processed in China.
It mean the current blockade is simply a panic move, to be able to capture the last tiniest part of the market, before they exhausting all growing potential.
So, summarise (I hope that the numbers are good):
1.,The interest rate lower than the inflation
2.,It driving more and more investment into the Chinese economy
3.,Due to this now they have many industry which can make the requirement of the whole world.
The question after all of this: where is the growth opportunity? They will exporting to the Mars, after all production capacity will be killed outside China?
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