Press Release Summary: Contrary to the hype surrounding the worlds fastest growing economy, industry rumblings suggest that France-based Portway Capital are mulling the prospect of a negative stance on the Yuan for the medium term. This despite China's Policy Makers' focus on controlling inflation with tough rhetoric, suggestive of interest rate rises, which have yet to materialize.
Press Release Body: If these rumors are true, then Portway Capital will be acting against a raft of evidence (not to mention market sentiment and analyst opinion) supporting the upward advance of the Yuan's trajectory.
Inflows of foreign capital into China continue to soar to new highs (one of the main reasons the government have not raised interest rates yet in to try and stem the flow of speculative, "hot money" into an economy already awash with cash), Policy Makers risk losing credibility if they do not execute on their tough talk of rate rises to curb inflation, and the Central Bank continues to sell bills and increase deposit reserve requirements in an effort to soak up cash, but executives at Portway Capital are said to be preparing for a classic contrarian play.
One industry observer speculated "Portway Capital may be one of the pioneers of the theory that China's Policy Focus needs to swing from Inflation concern to maintaining GDP growth". Chinas latest growth figures, show gross domestic product grew 10.1 percent in the second quarter from a year earlier, down from 11.9 percent for all of 2007.
These figures, when applied to economies such as the US and Eurozone, would be considered astronomical, but analysts at Portway Capital are looking at the bigger picture; consumer price rises (due in part to a recent 18% hike in fuel costs), coupled with a substantial slowdown in external demand (due to the US housing recession), and above all, a developing, labor-intensive nation of 1.3billion people (who cannot switch flexibly from relying on exports to domestic domand), necessitate a revision of the benchmarks. For this type of model, the analysts at Portway Capital have apparently determine that an economy can be considered in recession at growth figures of 7.5-8.0%.
Although Portway Capital declined to comment on the speculation, a source close to the firm stated that their expected timeline for a public shift in policy from the Chinese Central Bank (which may be the catalyst for a downturn in the Yuans gains) would not be expected until after the Beijing Olympics.
Web Site: http://www.portwaycapital.com
Contact Details: Michael Brown news@pr-newsnow.info
2022
