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Is China’s recovery for real?

Scott Tong Sep 2, 2009
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Is China’s recovery for real?

Scott Tong Sep 2, 2009
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TEXT OF STORY

Bill Radke: Chinese stocks have been wildly volatile as people ask themselves: Is China’s recovery for real? So we put that question to our Asia correspondent Scott Tong in Shanghai.


Scott Tong: If you buy the latest data, the answer is yes. Chinese banks lent out more money than expected in July. And in August, factories registered the most activity in 15 months.

That’s good for China, but also global suppliers of iron ore to make steel. And coal to power those factories. That’s how traders see it.

David Cohen is with Action Economics in Singapore:

David Cohen: Commodity markets do react to news out of China as never before. And they are the largest purchaser of certain kinds of metals.

And yet, investors can get too China happy, thinks Australian currency trader Sean Callow at Westpac Bank. Monday, for instance, Shanghai stocks fell nearly 7 percent for domestic reasons that may not impact the rest of the world. Still, most of the world followed Shanghai down.

Sean Callow: There’s a notion that if the stock market sells off then that must mean the locals know something that we don’t. And therefore the safest thing might be to count on a gloomier outlook.

Even as most economists forecast a sunnier outlook for China.

In Shanghai I’m Scott Tong for Marketplace.

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