Tag: Europe

Asia Impacting US Stocks

Again, America needs to count on Asia.  American stock prices at the end of last week encountered mega-instability once global markets were concerned that financial worries in the east may end up in the west, in particular Europe and America.

No country stands alone.  It’s not just Asia and America/Europe.  Right now, concerns have spread to Argentina and Brazil over potential Venezuelan currency devaluation.  This could result in a huge crisis for the entire Latin American region.

But still it’s Asia that has the power to result in worldwide economic problems.  Due to what’s been going on in the financial sphere in the eastern part of the region, huge instability could engulf US and European countries and even result in an abandonment of capitalism.

Further, if American lawmakers are unable to agree on necessary budgetary cuts, the country could end up encountering another credit downgrade.  While there is fear of limited growth in Asia, there is the possibility that mining and energy companies could go into decline.  One trader from London Capital Spreads said that it is likely markets will open lower due to Europe and America’s sovereign-debt concerns…

Europe Versus China

Are Europe’s Financial Woes Hurting China?

It’s bad enough that Europe is in a huge financial crisis, but when it starts impacting countries halfway around the world, then something has to be done. This is exactly what is happening right now.  Still, it’s not all bad news since China recently had some good results vis-à-vis its stocks rising.  There are many factors that will affect a country’s stock and it seems that currently, the focus is on inflation which is getting better.  With this in mind, the country’s policymakers could be set to reduce its tight grip on monetary policies.  This will definitely be helpful.  Nonetheless, there is a great amount of recovery in Europe that is needed for the citizens living there and for its impact on Asia and the whole of the eastern region.

China’s Power Producers

According to the 21st Century Business Herald, the cabinet in China is reviewing the possibility of raising the price of electricity that is paid to power plants.  This resulted in a rally led by Huaneng Power International Inc.  But the International Monetary Fund (IMF) has asked for there to be an increase in banking supervision as there are now greater risks with lending along with a jump in property prices.

China’s Presence in the West

Still, China is not being put off and is developing a true presence in the west.  The country currently  holds 25 percent of US Treasury Bonds (reserved for foreigners) and is busy pushing its way into Europe as well. It is exercising caution though.  While at one time it was the main capitals like Frankfurt, London, Paris and Washington which were taking  the main role, it now seems China is stepping on these financial centers’ toes.  So when Europe and other parts of the west start encountering issues that are too problematic to solve alone, it might just be the case that it will be China to come to its rescue.

China’s Wine Industry: East or West?

So it might be time for the Chinese to start getting a taste of their own medicine as it were…or trusting their own vineyards to produce good enough wines for them to drink.  Indeed, according to Jancis Robinson, a world-renowned wine authority, the Chinese have been making enormous strides in the field over the last ten years or so.  Although the Chinese are still very much enjoying and looking for fine wines from other countries, it could be possible that their own wines are really stepping up.  This shouldn’t be too surprising since numbers now show that China is among the top five grapevine growers in the world!

Things have definitely come a long way for China and wine.  As Robinson pointed out, when she first began seeking out fine wines in the country – back in 2002 – she didn’t exactly leave inspired, to put it mildly.  But just in 2010, she felt “heartened” having tasted various wines from the region that were “quite respectable.”  However, still only a very small portion of the country’s wines falls into this category; the vast majority of China’s wines is somewhat acidic and thin, and not impressive at all despite the country’s ripe, clean and fruity grapes. Robinson is extremely qualified to make this judgment since she is one of only approximately 300 Masters of Wine in the world, according to the Institute of Masters of Wine. 

So, it remains to be seen whether China will work hard at what appears to be a not-so-bad start and try to really make a go of things in the fine wine industry, or, whether it will continue to rely on imports from the west to satisfy its palettes.  Currently it looks like the latter may win out since its imports from regions such as Australia, France, Italy and South America, increased 57 percent from January to September of this year.  Europe seems to be the overall popular hive for wine imports to China. 

Clearly it becomes a bit of a chicken and egg situation.  The more China imports, the less likely it will be that individuals will be driven to develop their own wine to try to compete with these.

East Markets Up; West, Down

European Crisis

Stocks and shares in the east are faring well again, but in the west – particularly Europe – the situation isn’t as good.  The upcoming Euro leader meeting could be partly to blame.  While European leaders and executives were not anticipating a total recovery to their large debt issues, they remain somewhat helpful that the meeting will provide some assistance towards a strengthening of the EuroZone Rescue Fund.  While the Euro crisis will be discussed, it doesn’t seem that any decisions will be made quickly although France and Germany both seek to begin negotiations sooner rather than later.

Japan’s Market

The Nikkei stock average in Japan opened down 0.04 percent.  Europe is definitely having an impact.  According to SMBC Nikko Securities Equity Division GM Hioichi Nishi, “until the European plan takes shape and investors are reassured, it's difficult for markets to make major moves, and trading should stick to recent ranges.”  While the Euro is not faring too badly against the dollar, stealthily moving up 0.2 percent against it, (and the Australian dollar went up 0.3 percent too), it still looks like it won’t be moving all that much given that there is caution about taking any major steps before the meeting.  The entire Asian region is definitely standing back somewhat vis-à-vis activity within its markets with European shares declining last week and American stocks increasing.  This was good news as it indicated that fears of American’s economy once again falling into a recession, were relieved.