Friday, November 16, 2007

China - "A Small Setback"?

Thanks to John W. for sending me this link to The Economist. An incredible must read. Just when I finally went long again... still a relative strength play in spite of recent set-backs. That pairs trade mentioned last month has only gotten better since I last commented on it.

The Economist: A Small Setback

"In a little-noticed mid-summer announcement, the Asian Development Bank presented official survey results indicating China's economy is smaller and poorer than established estimates say. The announcement cited the first authoritative measure of China's size using purchasing power parity methods. The results tell us that when the World Bank announces its expected PPP data revisions later this year, China's economy will turn out to be 40 per cent smaller than previously stated.

This more accurate picture of China clarifies why Beijing concentrates so heavily on domestic priorities such as growth, public investment, pollution control and poverty reduction. The number of people in China living below the World Bank's dollar-a-day poverty line is 300m - three times larger than currently estimated."

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