Tony_onrock

However, evidence on the ground (e.g., increasing news reports of labour shortages in Wenzhou and Dongguan, key coastal manufacturing hubs) do seem to support the view that the employment situation for rural migrant labourers has turned the corner and improved markedly in Q2. The labour market continued to improve in Q3. The average monthly income of rural migrant workers increased to CNY 1,444 (USD 212) from CNY 1,404 (USD 206) in Q2, according to the NBS¡¯ Q3 Rural Migrant Labour Market Survey, released in November. As a result, more rural labourers went to work in cities. The number of rural migrant labourers, according to the NBS, increased from 140mn at end-2008 to 152mn at end-Q3-2009. Central and western regions catch up An important development in recent months has been that rural migrant incomes in central and western China have risen faster than those in the east. These regions, which are less developed and where wages are lower, are now catching up. According to the NBS, their average incomes rose by 3.2% q/q in central China and 4.3% q/q in western China, compared with a 2.8% increase in the east. As a result, the income gap between eastern China and other regions (based on the average of the central and western regions) narrowed from more than 20% in 2008 to around 5% at end-Q3 2009. As a result, central and western China have become more attractive places to work. During the first nine months of 2009, the share of migrant labourers working in the central region rose to 14.5% from 13%, and in the west to 18.9% from 15%. During the same period, the percentage of migrant labourers working in eastern China fell to 66.2% from 71%. Labour demand growth turned positive in cities in Q3 Reports from the Labour Market Monitoring Centre (LMMC), which is run by the Ministry of Human Resources and Social Security (MOHRSS) and oversees the collection of job-market information at the local level, also shed some light on what is happening. According to data collected by the LMMC in about 100 major Chinese cities (which account for around 55% of China¡¯s urban working population), the number of jobs listed at city job centres rose by 14.2% y/y in Q3-2009, the first increase after four consecutive quarters of decline, as shown in Chart 1. The job market has also become increasingly tight. Chart 2 shows that there were 94 open jobs for every 100 applicants in Q3, up considerably from a low of 85 in Q4-2008, the worst period during the latest economic crisis.

China ¨C Job watch 02:30 GMT 09 December 2009 The employment situation among rural migrant labourers has improved markedly since Q2 Central and western China led the labour-market recovery; the east is catching up The tightening labour market and higher wages in 2010 will support consumption growth The employment situation among China¡®s rural migrant labour force seems to have improved significantly as a result of the government¡¯s huge stimulus package. According to reports from China¡¯s National Bureau of Statistics (NBS), the unemployment rate for rural migrants fell sharply from around 15% at end-Q1-2009 to less than 3% at end-Q2. Data from urban job centres tells a similar story. Labour demand, measured by the number of jobs listed, rose by 14.2% y/y in Q3-2009, the first growth after four consecutive quarters of decline. As construction activity continues to pick up (see OTG, 19 November 2009, ¡®Watching cement dry¡¯), the labour market will tighten and wages will likely rise in real terms in 2010. This will provide important support to consumption. A U-turn in the rural migrant labour market Rural migrant labour was hit hard in Q4-2008 with the outbreak of the crisis. According to an NBS report released in March 2009, 70mn (50% of the total 140mn rural migrant labourers) returned home in January 2009 before Chinese New Year. Of those, 62.4% left the eastern region, where the economy was worst affected. Only 56mn (80% of those who returned home) returned to the cities after the holiday. The NBS report suggested that 11mn of the 56mn returnees had failed to find jobs by end-Q1-2009, implying an unemployment rate of 19.6% among the returnees. However, the report did not say how many of the rural migrant workers who stayed in cities over the holiday lost their jobs. We believe the number is likely to be low, since the high cost of living in cities probably means most migrants who lost their jobs would have returned home. Here is a simple calculation. We use the official registered urban unemployment rate (4.3% in Q1-2009) as an approximation of the unemployment rate among rural migrant workers who stayed in cities. This suggests that 3mn rural migrant workers, out of the 70mn who stayed in cities over the holiday, were jobless at end-Q1-2009. Combining this with the number of unemployed rural migrant workers among those who returned home over the holiday (11mn out of 56mn), this implies an unemployment rate for all migrant labourers of about 11% at end-Q1. In some badly affected areas, the rate would have been higher. For example, in Guangdong province, around 1.5mn out of some 10mn rural migrants were unable to find jobs at end-Q1, according to one news report, implying an unemployment rate of 15%. The employment situation for migrants improved markedly in Q2 as the government¡¯s huge stimulus package kicked in. According to an NBS report released in September, less than 3% of all rural migrants were unable to find jobs by end-Q2, implying that the unemployment rate had fallen by more than 70% since end-Q1 (when it was around 11%). Moreover, among the unemployed migrants, 29% said that they had voluntarily quit because they thought their wages were too low, and another 50% said they had just come to the cities or expected to be only temporarily unemployed. Sceptics may question the sharp improvement in such a short period, and there may indeed be some problems with the official data.

There is a rule and there is a way. If you really, really want to get to talk to the teacher on the school ground, it can be done.

Analytical Perspective Macro Policy Outlook On policy outlook, government officials and policy advisors have been in the past weeks seriously looking into the strategy for exit from expansionary policy. We think a likely roadmapfor the next six months or so should look like the following: 1) The most likely near-term policy option is to raise the reserve requirement ratio (RRR) on banks. We think this may take place within the next 2-3 months. The main drivers for action include the surge in monthly FX reserve accumulation (to USD61bn in Sept) and the need for less costly instruments (such as the RRR hike) to soak up liquidity. When the RRR hike is implemented, it may have a short-term negative impact on market sentiment especially on banks, properties and construction materials, although the real impact will be muted as the RRR is simply a cheaper alternative to PBOC bills for liquidity management purposes. 2) By the end of the year, a key message from the fiscal authority will likely be that next year's fiscal deficit will be no more than this year. This implies that next year's govt expenditure growth will be much slower than this year as the deficit will be capped at RMB950bn. We expect next year's revenue growth to be around 15% and that means overall expenditure growth will be about 13%. As social spending should be the priority, we think the government's capex growth next year will be no more than 20%, down from close to 80% this year. This suggests that China's fiscal policy will not be a reason to be bullish on construction materials and machinery for next year. 3) The RMB will likely resume its appreciation vs the USD from Q2 next year. We think three arguments will convince the government to do so: by Q2 China's yoy export growth will likely exceed 15%; global political pressure will intensify as the RMB has already depreciated 10-30% against many currencies over the past seven months; imported inflation will become a worry. RMB appreciation is most positive for airlines and is, on a long-term basis, supportive of market sentiment for asset plays such as properties. 4) The use of interest rate instruments remains the most contentious debate, as the hawkish views argue that the central bank should hike rates pre-emptively, while the opposing camp are concerned about hot money inflows if China raises rates earlier than the US. While the outlook for interest rate changes is less certain than other policies mentioned above, our central scenario remains that the PBOC will likely begin its rate hike cycle from Q2 next year. A key beneficiary of rate hikes is insurance, while the victims will include property and, to the extent the rate hike will be asymmetric, banks. 5) We do not expect major tightening policies specifically targeting the real estate sector in the near future. So far the consensus view within key government agencies seems to be that the recent rally in property prices in some large cities remain regional specific, and are not yet posing a systemic risk to the macro economy or the banking system. And the government would like to see real evidence that the export sector has fully recovered (we think it will be in Q2 next year) before formally withdrawing stimulus from the property sector. Given these views, major changes to real estate policies are unlikely in the near-term (e.g., next 2-3 months). Specifically, we think the recent market talk that regulators will abolish the 30% mortgage rate discount (to the benchmark rate) for first home buyers before year-end is very speculative in nature. Overall, we think the big macro and policy picture should remain net positive for the market in the next 3-5 months, as companies benefit from rising pricing power but are not yet subject to excessive policy tightening. However, the macro environment will likely become more challenging from Q2 next year, when risks such as yoy GDP deceleration (to occur in Q2), asymmetric rate hike, price control, and fear of US second dip will intensify.

Economic Indicators Lending (Oct) October's new lending came in at RMB253bn, significantly below the market consensus of RMB350bn and last month's RMB516bn. We knew that lending by big banks was slow, but it is surprising that smaller banks are also reporting lower figures. It reflects the impact of tightening capital requirement and/or weaker-than-expected loan demand from the corporate sector. Ytd urban FAI growth slowed to 33.1% yoy (from 33.3% in Jan-Sep), same as our prediction but lower than consensus of 33.5%. This implies that monthly FAI growth fell to 31% yoy in October, down from the 35% in September and the recent peak of 39% in May. The RMB amount of new project starts also posted slower growth of 66% yoy in October, down from the average of 80% yoy in the past four months. Overall, these data points are slightly negative for banks, construction materials, construction services, and construction machinery. Retail Sales (Oct) Retail sales growth is the brighter spot. Its October reading accelerated further to 16.1% yoy from 15.5% in September, and exceeded market expectation of 15.7%. Earlier last month, the Ministry of Commerce reported that daily retail sales were up 18% yoy during the National Day Holidays. We think it partly reflects improved consumer confidence as labor markets are tightening especially in export-related sectors. At the product level, the retail items that saw acceleration in growth include foods, electronic appliances, and cosmetics. Export (Oct) Export growth is in line with consensus. Exports fell 13.8% yoy in Oct, improving from the 15% yoy drop in Sept. We expect another 15-20ppt increase in yoy export growth in the next two months, on strong sequential recovery (driven by a front-loaded US recovery) as well as an extremely favorable base effect. Imports fell by a larger-than-expected 6.4% yoy in October, resulting in a larger trade surplus of USD24bn. The rise in trade surplus, together with a sharp recovery of exports and growing international political pressure, will lead to a resumption of RMB appreciation from Q2 next year, in our view. IP (Oct) IP growth accelerated to 16.1% yoy in Oct, up from 13.9% in September, but the improvement is mainly explained by the base effect. Inflation (Oct) Inflation --both CPI and PPI -- continues to show an narrowing of yoy decline, although the pace of improvement is slightly slower than consensus expectations. CPI fell 0.5% yoy in Oct, 0.3ppt less than in Sept. PPI fell 5.8% yoy, up 1.2ppts from Sept. On a mom basis, the major increases in CPI are seen in apparel (up 0.8%), and housing (up 0.4%). Going forward, we think Nov CPI inflation will turn positive and December CPI will likely be in the range of 0.5-1% yoy. In October, food prices declined partly on seasonal factors. But in the coming months, the continued increase in housing prices, oil price adjustments (e.g., the administered oil prices were lifted by 8% just a few days ago), and worsening weather conditions in coming weeks will pose upward pressures on inflation.

Inside the emergency room, I saw the middle aged man again. He came to. He just passed out from the pain. Aparently he was shot in the elbow and the guys carried him in by the legs and arm. He fainted from the pain. The doctor offered him a cup of cold tea and asked that he no mind it being cold. Some one also cracked a joke that he would no longer fear being kickout of the ward at night time again now that he was officially checked in. His wife was there for a surgery and he always try to sneak into the ward to sleep at night time to save money on hotel. Before dawn, after the loud noises went down we went back to school. And in the morning, I started my journey on foot back to the train station. On the way pass the truck, the driver seatas empty. The guy was no longer sleeping in there as he did the night before while waiting for the tanks that never came. There was a little round hole in the windshield. On the head rest, there were some dark liquid stains,kind of smudged towards the driver door. He had long hair and they were kind of dirty too. There was a brief TV news report and news paper article issued by the army on events of that night, after Tianmen Square, 28 were arrested. The army saved the buses and deated an amempt by some holigans who try to paralyse the bus transport for Bus No. 13. The mayor thanked the army. I saw a post on AntiCnn.com posting a copy of the new event, in order to let the Chinese people know the truth and shield them from all lies reported by CNN.

It was some time after 3 am. My head normally start to hurt if I stay past 3 am and I was starting to have a headache. I closed my eyes and tried to get some rest when I heard some noise. Some nurses were pushing a middle aged man who was smoking a minute ago from them saying something like "lao bu yao lian" (dirty old man) and then one girl screamed£»xue! (Blood). From the buses, people started to cream as well ¡°run,run" . Then there were the loud noises like on Chinese New Years Eve... I ducked behind the corner of the building. People ran, carrying the man that a second ago was believed to be a pervert. I looked out into the south, soldiers on foot, in a line, shooting and walking on foot towards the north. Another group in the same position towards the west, behind some that ran out of the buses. It was damn loud. The others were gone in my corner, I still had a cigarett in hand, behind the corner. It was about 50 yards or less, but still a bit far fromt the buses and I saw some people I met in the afternoon dash out of the bus circle and then back. Behind me was a straight street with no more places to hide, across from me was the metal fence. Bits of cement from the wall next to me started to fly around after a few soldiers took interest in my direction. There was little choice, I dashed across and scaled the metal fence, rolled on the grass and then under an ambulence. Got up, took another mad dash across the yard into the emergence building of the hospital. To date, I still believe given the proper training I could make it to the Olympics in high jump.

In the afternoon, a helicopter came. It had loud speaker and started broadcasting warning for everyone on the ground to disperse by 4 pM or else.. (can't remember the exact deadline time, but it was in the afternoon). It dropped leaflets as well. Well, people started to realize how serious it was then and some left. Still a group of about 2-3 hundred remained. Some pesimistic ones wrote notes etc. Most had no assets any way and wrote note to their sons to revenge their death should it happen. Then it was the long wait. The deadline passed, nothing happened. Night came, nothing happened. After a long day, people got really tired¡£ By 12 some went into the buses to rest or nap. Some could not stand the smell of the gasoline and took to the corners of buildings to rest. In our corner, there were some pretty nurses and a few guys, smoking and flirting. It was warm and nice.

The soldiers were gone and more students came back, including a friend of mine who said he saw the tanks in action. People started to talk what should be done now that the battle at the square was clearly lost. It was agreed that buses should be used and beer bottles should be collected. University of Chemistry was right around the corner and there were some with a good knowledge of how to make the cocktails. No13 buses were pushed over into the intersection, in a circle. Cocktails were made, put underneath the buses, groups were organized and discussion made on when to throw the bottles when tanks ram through the buses as they did at the square. One guy who knows how to drive was selected to drive a truck from the South side. The truck was loaded with bottles of cocktail and he was to put a stick on the paddle before jumping out. The truck was supposed to ram into the buses after the tanks gets into the middle of the bus circle.

Our college was in the northern part of town and I was not sure how to get back. Luckily I saw a girl that I knew on a bicycle, she was trying to cross Changan Street and failed at a few spots, scared and looked really tired. We shared the same bike and after hours of riding through the street got back to the north side of town. At the north side of town (north 3rd ring road), close to our school, a group already gathered. People were still debating wether the soldiers opened fire. Then some people went into the Sino-Japanese Friendship Hospital and carried out bodies. The debate stopped and the discussion turned to what should be done next. On the street, there were army trucks packed with soldiers. They were those that were sent in much earlier and were blocked there days before. Like what happened earlier, there were people talking to the soldiers and try to convince them that the army did open fire and try to tell them that was wrong. While that was going on, some people already opened the gas cover and put some rags in and were debating whether to set the trucks on fire with the soldiers in or whether they should be warned to get out first. These soldiers did not have bullets. As the debate were on going, then suddenly they all drove away. I guess they got orders to move.

It was two subway stops between the train stattion and my old spot on the east side of the square where our group were£¬ but it was blocked by soldiers. They were sitting in the middle of the road, a group, apparently with no knowledge of what happened during the night. They got into position in the morning, like myself. It was about half bus stop distance from the square. A group of civilians were recounting the stories to the soldiers near Tong Ren Hospital, arguing, really, wether the army opened fire. I sat down with them and watched. Then there were some really loud gun shots, from the sound of it, coming from west. We all ran off from the soldiers. Pretty soon I saw one of those three wheeled cart, on it was a person in white shirt, being rushed to Tong Ren hospital. At the time I could not see cearly if it was a man or woman, but could see that the person was bleeding. (Later I watched the scene from CNN). Clearly I could not get through to the west where the square was or north where Changan Street is. So I ran back towards the train station. On the way back at Chongwenmen, equal distance between the square and train station, I saw a group of people holding a chared remains of a soldier on the south west corner of the intersection, saying that he fired from the overpass. I did not stop for long and kept on back to the train station.

On June 2, my best friend drove across town to the university I was teaching at to deliver the news to me. He was quite nervous, in civilian clothe and exhausted after navigating through town in an army jeep. I knew it was not an easy task in those days where the road was blocked all over the place in Beijng by demonstrators. The message was brief and he did not stay long. Something serious was going to happen, I better find a way to get wife and my son out of town. My boy was only a few days old. We got a van and drove him out to grandpa's place that night. Nothing happened the next day, then next. I started to doubt if my friend was a bit to paranoid or mistaken. Then in the evening we were all having dinner, Premier Li Peng went on the television and delivered the speech. I rushed to the train station, but the last train was already gone. It was a long night and a lot of things happened. In the morning I caught the first train back. One hour ride into Bejing Train Station and then I started to walk back to the Square.

Wife's flight is seriously delayed due to foggy conditions, so I guess I will write about what I experienced during the last few days.

Dry cleaning is pretty cheap in Shanghai. I don't know the price through. They even come to pickup and drop off afterwards.

Quite interesting.

Sorry, I don't have any information on the garlic trade. I used to receive reports on commodity research but since told them to stop sending me such reports cause we are not allowed to invest in commodities.

Because certain restrictions, I will not post the source of the various reports here any more. Should any one be interested in the full report or want to verify the source, I will provide them via private email.

In the last two days, several government agencies issued a number of new policies/rules related to FX conversion, travel, and SOE financial management. 1) SAFE rule to limit hot money inflows The State Administration of Foreign Exchange (SAFE) issued a notice this afternoon in an obvious attempt to limit hot money inflows by tightening the restrictions on FX conversion by individuals. Currently, any Chinese citizen is allowed to convert up to USD50,000 to RMB per year. However, many people (mainly overseas Chinese) have used multiple names (some time as many as 10 or 20 of friends and relatives) to convert large amounts of foreign exchange into RMB for the purpose for purchasing properties and stocks in China. Today's SAFE rule prohibits any overseas individual or institution from transferring FX to more than five different individuals in China for FX conversion purposes. This policy will make it less convenient for overseas investors to use the above-mentioned channel to invest in China. This is one of the initial steps that the government uses to limit hot money inflows. Other options, some of which were used before, include identifying and penalizing fake FDIs, over-invoicing of exports and under-invoicing of imports, the black market, and underground exchange bureaus. At some point, especially when property bubbles become evident, the government will probably tighten the restrictions on property purchases by foreigners (the implementation of which was relaxed in many localities over the past one and half years). We do not think today's mini step by SAFE will have an material impact on the market, but it does signal the government's intention to take further actions as asset bubbles develop further. If the restrictions on foreigners' purchase of properties in China are re-imposed, it would be a significant negative to sentiment on property stocks.

Can't find the old post when we started the debate where RMB will go when it was 8.28. It would be interesting to dig up that old post.

Well, I was there, chased, shot at and ran for my dear life. Any one who went through it will remember no matter what the government say or what the press reports.

Read a few more reports on PRC economy, checking the reported figure and the cement and steel production figures. The conclusion is that based on the cement and steel production figures, the GDP and investment figures for Q1 09 were inflated and the peak of investment may peek in Q1 10, with inflation likely to follow at or around that time. Currency appreciation, despite all the resistence, will happen over the course of next year when export numbers pick up and more and more liquidity pour into the Chinese assets, putting more pressure on the Yuan to appreciate. The second part is just my own view. Just bought an Town house (300 sm) in Nanning on the river there to hedge the currency and inflation risk.

Eric, the story about soldiers from the North and South in Tianmen Square are baseless. I will not elaborate. Crime rate in China are lower, esp. violent crimes. Part of it is due to the punishment and another part is due to the fact that China has more or less only one race. You do hear and see a lot of crimes being committed by Xinjiang people here. Take Shanghai for instance, pick pockets are a lot less now that the Xinjiang people are being chased out. The little town I lived in in NJ had practically no crime rate to talk about. Really depends on location. In China the same is true. In poor Jianxi province, Henan Province, Guizhou etc. crime rate is much higher. Crime against property are more common in China. Mugging, which is pretty constent thing in inner cities in the US is relatively rare. You don't get much money and very little change of probation or parol for mugging some one.

China just released the October economic data. Overall, the data set should be viewed as neutral, but the more interesting part is structural: it shows weaker-than-expected loan and FAI growth, and stronger-than-expected retail sales (consumption) growth. This is broadly consistent with our view that investor attention should gradually shift away from FAI-driven sectors towards consumption. October's new lending came in at RMB253bn, significantly below the market consensus of RMB350bn and last month's RMB516bn. We knew that lending by big banks was slow, but it is surprising that smaller banks are also reporting lower figures. It reflects the impact of tightening capital requirement and/or weaker-than-expected loan demand from the corporate sector. Ytd urban FAI growth slowed to 33.1% yoy (from 33.3% in Jan-Sep), same as our prediction but lower than consensus of 33.5%. This implies that monthly FAI growth fell to 31% yoy in October, down from the 35% in September and the recent peak of 39% in May. The RMB amount of new project starts also posted slower growth of 66% yoy in October, down from the average of 80% yoy in the past four months. Overall, these data points are slightly negative for banks, construction materials, construction services, and construction machinery. Retail sales growth is the brighter spot. Its October reading accelerated further to 16.1% yoy from 15.5% in September, and exceeded market expectation of 15.7%. Earlier last month, the Ministry of Commerce reported that daily retail sales were up 18% yoy during the National Day Holidays. We think it partly reflects improved consumer confidence as labor markets are tightening especially in export-related sectors. At the product level, the retail items that saw acceleration in growth include foods, electronic appliances, and cosmetics. Export growth is in line with consensus. Exports fell 13.8% yoy in Oct, improving from the 15% yoy drop in Sept. We expect another 15-20ppt increase in yoy export growth in the next two months, on strong sequential recovery (driven by a front-loaded US recovery) as well as an extremely favorable base effect. Imports fell by a larger-than-expected 6.4% yoy in October, resulting in a larger trade surplus of USD24bn. The rise in trade surplus, together with a sharp recovery of exports and growing international political pressure, will lead to a resumption of RMB appreciation from Q2 next year, in our view. IP growth accelerated to 16.1% yoy in Oct, up from 13.9% in September, but the improvement is mainly explained by the base effect. Inflation --both CPI and PPI -- continues to show an narrowing of yoy decline, although the pace of improvement is slightly slower than consensus expectations. CPI fell 0.5% yoy in Oct, 0.3ppt less than in Sept. PPI fell 5.8% yoy, up 1.2ppts from Sept. On a mom basis, the major increases in CPI are seen in apparel (up 0.8%), and housing (up 0.4%). Going forward, we think Nov CPI inflation will turn positive and December CPI will likely be in the range of 0.5-1% yoy. In October, food prices declined partly on seasonal factors. But in the coming months, the continued increase in housing prices, oil price adjustments (e.g., the administered oil prices were lifted by 8% just a few days ago), and worsening weather conditions in coming weeks will pose upward pressures on inflation. On policy implications, the slowdown in October lending and FAI growth may slightly ease the urgency for monetary policy tightening in the near-term, but the broad roadmap for the government's exit from expansionary policies should remain intact.

In its quarterly monetary policy report today, the PBOC removed the usual reference to "maintaining basic stability of the exchange rate". The new statement on exchange rate policy now reads: "to improve the exchange rate formation mechanism by taking into account international capital flows and major currencies' movements." We view this as an early signal that the government is preparing for the resumption of the appreciation of the RMB, which has been a de facto peg to the USD since mid-2008. By noting "major currencies' movements", it means that the government has realized that the RMB has depreciated significantly over the past seven months against other currencies (by 7% on a REER basis, and 10-30% against some major currencies). So far, G3 have been complaining about the RMB depreciation, and in the coming months we think emerging market economies such as Korea, India, Brazil and Mexico will also likely express their concerns on the RMB policy. China, with a strong desire to become a "responsible large nation", will likely react positively to these pressures especially from EM countries. The reference to "international capital flows" by the PBOC points to another interesting consideration. That is, the government remains concerned that if China's interest rates are rising and the RMB also appreciates, it would attract capital flows that will increase the PBOC's sterilization costs and/or increase the risks of domestic asset bubbles. Therefore, China will likely put pressures on the US for earlier Fed rate hikes, which will make China's job easier (i.e., China's rate hike and RMB appreciation would attract less capita inflows compared with the scenario in which the Fed holds its low rates for too long). Also, we believe that the Chinese government will likely resume (or toughen the implementation of) some administrative measures in dealing with hot money inflows. A few months ago, our prediction was that the RMB would resume its gradual appreciation from Q2 next year. Given that export recovery is stronger and front-loaded, and global political pressures are intensifying, we now believe that the RMB will likely begin its appreciation from Q1 next year (most likely second half of Q1). We think the annualised rate of RMB appreciation could be as fast as 4-7% in Q2 when export growth peaks at 15-20% yoy, but the pace of appreciation may slow to an annualised 2-4% by the end of the next year when export growth decelerates again on the "second dip" of US economic growth. At the sector level, the impact of RMB appreciation is positive for airlines, steel, and paper, but is negative for oil, non-ferrous, electronics, and garment industries.

For those of you who may be amused, amazed or disgusted at people in their PJs roaming around the city in Shanghai, it may be a thing of the past. To prepare for the world expo, Shanghai is pursuading people not to wear PJs outside of their homes. Though I never found it a pretty sight, now I decided to preserve this tradition by wearing winter cotton PJs on the street and encourage other like minded people to do the same. My favorite is a pink set with teddy bears on it. Here are some links showing Pascal and one other guy wearing it. Next time in Shanghai, watch out those guys rollerblading in pink pajamas on the street or at the World Expo Fair! http://www.atomicskate.com/2009/03/04/roll...-moganshan-3rd; http://www.atomicskate.com/2009/08/31/skat...-shanghai-2009/ http://www.atomicskate.com/2009/04/28/roll...g-in-shengsi-2/