The chinese government stated on July 1st that they had 30% more than reported loans to municipalities for construction projects on their books. So there is possibly 30% more public sector economic activity than previously realized in China. There is another Chinese economic story. A new physical precious metals exchange, accesible to all Asians opened up in China. Here is a post from Ned Naylor Leyland's blog 24hourgold.com which helps explain recent gold price action from the last 5 trading days.
Published : June 29th, 2011
"Today was the inauguration ceremony replete with myriad ministers and mandarins from central and regional government.
This initiative is supported at the highest levels in China with SOEs as shareholders, the support of the Beijing Gold Exchange and SAFE (State Administration of Foreign Exchange).
PAGE are buying into the concept that leverage has its limits and that leasing must also be carefully monitored.
This new exchange is international facing, in line with Yunnan province being China's formal gateway to trade with its neighbours.
This exchange with a FIX (8am Beijing time) has major ramifications has the potential to improve price discovery and show up the shabby efforts of its competitor markets.
The biggest bombshell however, is the offer of Rmb contracts for international investors, agreed by SAFE.
The international part of the Exchange's business is expected to be available by Q4.
Meanwhile, plugged straight into the platform are the customers of Agricultural Bank of China (320million retail + 2.7million corporate) who are able to trade 10oz mini-contracts.
To give an idea of the scale here, if 1% of their customers bought one contract that would represent around 100tonnes of physical.
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