Do you think they could do this for other minerals such as iron ore?
I always thought the China will close argument was a little thin. It's not just a command economy when it's convenient.
Possible I guess newjez.
After all, they have long been the worlds biggest iron ore producer from their own reserves, even when the price was under $30/tonne, despite the assertion that they are already broke at current prices. I'm not sure I buy the argument that every last lump of iron ore within the borders of China is pure, ultra low grade crap. Even if they don't have a lot of reasonabley good stuff, how much they have on hand is relative to the rate of consumption. As that falls, the need to pay top dollar for ours to secure supply becomes less pressing.
After all, they have long been the worlds biggest iron ore producer from their own reserves, even when the price was under $30/tonne, despite the assertion that they are already broke at current prices. I'm not sure I buy the argument that every last lump of iron ore within the borders of China is pure, ultra low grade crap. Even if they don't have a lot of reasonabley good stuff, how much they have on hand is relative to the rate of consumption. As that falls, the need to pay top dollar for ours to secure supply becomes less pressing.
Exactly. If their choice is to subsidize their own industry or pay more to foreigners, what would they choose?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
The people who think China will shutdown its mines must accept that the same logic would dictate that the entire Australian economy will shut down. Every Australian worker is overpaid by China's standards. If our government can maintain the current labour award wages, China can maintain its mining industry.
“With the latest tax, Chinese can only offer around $62, which means Australian sellers will need to cut prices by about $3.50-$4 a tonne,” said a senior trader at major international trading house.
Something I thought was always on the cards. China imports capital goods like commodities, manufacture them into something and export the surplus of value added goods to pay for the imports. Until now massive reinvestment has hidden the thin margin. If the Chinese start consuming more of their own production, then either they must get better prices for the exports or lower the price of their imports.
Until the Chinese central bank has added an element of forced reinvestment by simply printing more money than the Western majors, buying foreign currencies and essentially extending credit to those Western majors. (beggar they neighbor) But China printing press has slowed to 5.5% pa or so, half the older of 11% pa. Past 12 months Chinese has not net increased its US treasuries holdings. In theory now the Yuan could float as freely as those of the Western majors without a worry of undue devaluation for the FX holders.
But all that previous printing has created a huge speculative bubble which if it implodes won't be pretty.
Name your poison!
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
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