Great to see the comments working again, and great to see the hypothesis that led one to believe this to happen after the anniversary celebrations, confirmed.

The stockpiling of a voluminous and relatively inexpensive commodity like iron ore continues to puzzle though. Not quite your speculators assets and very high transaction costs when liquidating. Maybe some producers expect the gvt to ration iron ore imports in the future in order to force a long overdue consolidation and rationalization of the sector. In that case the marginal steelmakers would tend to import disproportionally.
Apart from speculative and strategic explanations (iron ore) , I believe that commodity imports have become a short term policy instrument, in order to manage the CA. Not quite sustainable though unless there is a world wide recovery, to which China’s peculiar style of stimulus, as you have argued regularly, will contribute much less than the raw numbers would suggest.

Absolutely agree with the concept of free trade. But trade is a two way street and China does a masterful job of talking the talk while avoiding walking the talk.

Controlled exchange rates, arbitrary regulatory rules, inconsistent application of the law all are effective means of keeping foreign competitive products at bay.

This is not to say the US, the EU or the Aussies are clean either. It’s just that no country is more vocal than China about free trade while maintaining a system that stacks the deck against foreign firm.

Not sure if this link still works (and you have to have a subscription china South Morning Post) but here is Shirley Yam’s great column on the new China Antitrust law.
http://www.scmp.com/portal/site/SCMP/menuitem.2af62ecb329d3d7733492d9253a0a0a0/?vgnextoid=7ca8217311da2210VgnVCM100000360a0a0aRCRD&ss=Columns&s=Business

To summarize her point, while indigenous China mergers occur without contest, cases involving foreign firms get the attention. Coca Cola/Huiyuan, Mitsubishi/Lucite, InBev/Annheuser Busch are the 3 cases that have resulted in Ministry of Commerce action.

Furthermore, China’s domestic economy that does not operate in a market way with heavy government intervention in output pricing, capacity (expansion and contraction), employment, input pricing, etc…how can one ever hope that there will be a level playing field if government officials micromanage?

Even if the CCP central committee wanted to promote free (let’s say impartial) trade in the China markets, the fact is that the decisions that are critical to a successful product launch and business operation are often made by local city and provincial officials who usually have a different agenda. Even supposed central regulatory bureaus like Ministry of Commerce, the CSRC and others have branches offices in various cities where the local officers do not administer the regulations consistently.

Of course, there are all very good, innocent explanations as to why China has these institutions and economic structure. But the reality is that such structural controls can be used for perverse reasons as well…and they are.

The Economist had a good article called “Impenetrable” in its October 15th edition. Here is an excerpt…
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Local officials go to great lengths to protect companies on their patch, often by giving them preferential access to land or credit, or by easing bureaucratic constraints for them. All the red tape would at least provide plenty of work for multinational law firms, were they permitted to employ Chinese lawyers–which they are not.
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I continue to scratch my head as to how the WTO can assure fair trade with countries whose indigenous economy is not even close to a market system.

I have sensed for a few years there has been a corner in copper and it appears if this is true that it is being aided and abetted by Chinese hoarding. Now would be the ultimate time for the cornered to get out and leave someone else holding the bag. The collapse in homebuilding and commercial construction around the world has to have provided a huge hit to the copper business. I sense China and India to some extent have pushed the idea of growth to the point beyond markets. In the meantime, Wall Street, the US government and the Fed are set on destroying the US in order to save the equity of the banks.