1/4
"The weakness in producer prices was driven in large part by declining global commodity prices compared with last year, economists said. But they added that the data also reflected pressure on demand across the Chinese economy."
ft.com/content/76515c…
"The weakness in producer prices was driven in large part by declining global commodity prices compared with last year, economists said. But they added that the data also reflected pressure on demand across the Chinese economy."
ft.com/content/76515c…
2/4
This is why, contrary to the expectations of some analysts, countries like China cannot replace their USD reserves with additional holdings of energy and industrial commodities.
This is why, contrary to the expectations of some analysts, countries like China cannot replace their USD reserves with additional holdings of energy and industrial commodities.
3/4
The problem is that China is the world's largest consumer by far of these commodities, and any slowdown in the Chinese economy is likely to be result in much weaker global demand for these commodities and so lower prices.
The problem is that China is the world's largest consumer by far of these commodities, and any slowdown in the Chinese economy is likely to be result in much weaker global demand for these commodities and so lower prices.
4/4
If China held these commodities as reserves, in other words, their reserves would be most valuable when they needed them least, and least valuable when they needed the most. That is the opposite of what you want from reserves.
If China held these commodities as reserves, in other words, their reserves would be most valuable when they needed them least, and least valuable when they needed the most. That is the opposite of what you want from reserves.
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