The price of pork in China

Inflation is becoming an increasingly important problem in China. The price of pork in particular is crucial.

Consumer prices in China rose by 8.7% in the year to February, the highest rate for more than 12 years. Food prices were 23.3% higher than a year earlier.



Pork has been a cornerstone of the Chinese diet for centuries. Rows of 2,100-year-old terra cotta pigs were recently discovered near Xian, a city better known for terra cotta warriors. China’s 1.3 billion people eat more than 92 billion pounds of pork a year — a fifth of a pound a day for every man, woman and child.



And just as higher gasoline prices can lead to a political reaction in the United States, the Chinese government is particularly worried about soaring pork prices because of their impact on household budgets and the way they can exacerbate income inequality.

Commodities "Supercycle" - The Long Boom

Imports of both soya beans and oil increased 35x since 1999. Wow!



From the Economist:

China, with about a fifth of the world's population, now consumes half of its cement, a third of its steel and over a quarter of its aluminium. Its imports of many natural resources are growing even faster than its bounding economy. Shipments of iron ore, for example, have risen by an average of 27% a year for the past four years.

Chinese demand for raw materials of all sorts is growing so fast and creating such a bonanza for farmers, miners and oilmen that phrases such as “bull market” or “cyclical expansion” do not seem to do it justice. Instead, bankers have coined a new word: supercycle.

China makes hostile bid for iron ore in Australia

On the one hand, the increasing wealth and financial sophistication in China makes further hostile cross-border M&A bids more likely. Offsetting this, in the U.S. at least, is negative political sentiment.



Geopolitically, massive Chinese investment in Australia must be troubling for those tasked with sustaining American influence in the Asia-Pacific region.



Yet another interesting sitution that bears closer attention.



From today's WSJ:

MELBOURNE, Australia -- In China's first hostile bid for an Australian company, Sinosteel Corp. launched a cash bid for iron ore miner Midwest Corp. that values the target at A$1.2 billion (US$1.1 billion).



The move illustrates China's strong desire to get a foothold in Australia's resource sector as demand, and prices, for raw materials surge. It also comes as big miners BHP Billiton Ltd. and Rio Tinto PLC squeeze Asian steel mills for a 71%-plus rise in iron ore contract prices.



"It's time Midwest shareholders had the opportunity to decide for themselves the value of their investment in Midwest," Sinosteel President Tianwen Huang said.



If the bid is successful, it will be China's first hostile takeover of a foreign company, according to data supplied by Dealogic, but not its first attempt.