Last Updated : 10 January 2013 at 11:35 IST
The Great Chinese turnaround is for real: Kunal Shah
Source :Commodity Online Editorial Desk
Author :Rakesh Neelakandan
For the time being, I expect to see no headwinds affecting China. Nothing immediately at least. But in 2-3 months, I see a Spanish request for bail out happening. This would have implications, not only for China, but for the entire world as concerns return.
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Pessimism is 'out of fashion' these days. Its place has been taken over by skepticism. So when analysts say that China has made a turnaround in exports and that it is a genuine turnaround, would you blame Rakesh Neelakandan of Commodity Online for being fashionable? He set out to validate his fashion statement and ended up calling Kunal Shah, Head of Commodity Research at Nirmal Bang Commodities. Four-five stylish volleys demystified the ambience.
Welcome to the ramp...
Commodity Online: China has witnessed its exports jump by 14% in December from a year earlier beating the Bloomberg estimates of 5%. Analysts say this is a genuine turnaround, do you agree?
Kunal Shah: I agree with that. The worst is over for the Chinese economy, I believe. There is a gradual recovery underway and some upside is visible. Slow down is moderating as we see improved PMI figures since October. GDP growth projections are also encouraging.
Commodity Online: What are the headwinds in store for China?
Kunal Shah: For the time being, I expect to see no headwinds affecting China. Nothing immediately at least. But in 2-3 months, I see a Spanish request for bail out happening. This would have implications, not only for China, but for the entire world as concerns return. I would also like to see how the new regime in China that would take over in March, warms up to the challenges of economy; whether they change their course or stick to the status-quo.
Commodity Online: Do you see any bubble formations in Chinese economy?
Kunal Shah: Not for the time being.
Commodity Online: But they are incurring debts of humongous proportions...
Kunal Shah: They may be...but they are also good money managers...not that aggressive in spending compared to US.
Commodity Online: Now, the last question and it is also the most important one: can we trust China data?
Kunal Shah: Obviously you have to. It is official and you have not much of alternatives. Unless proven otherwise, we will have to trust data from China.
Finally China is getting glamorous, yet again! May be you should book your tickets for the next show, especially those who have gone long on base metals and crude oil.
Forget hard landing! The show-stopper is back with a bang!
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