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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Bill Gates
March 7, 2012 at 10:07 AM

China may not be able to avoid a hard landing

The anxiety about China pre-dated Beijing’s announcement this week cutting its growth forecast for the first time in eight years. It was one element of the pullback from the rally on Wall Street. The concerns were nicely encapsulated in a January Societe Generale report to clients. Warning that China is entering “the danger zone,” it pointed to slowing construction and exports, “the two main legs of China’s growth.”

In addition, “Housing demand is slowing, property developers are slashing prices to clear out inventories and pay back their loans and land sales are falling, putting further pressure on already tight local government finances.” Sounds almost American. SocGen analysts were pessimistic about new stimulus because of an already high debt and deficit burden. “Chinese authorities have started to ease monetary policy…, encouraging lending to SMEs, etc.), although the size of the shadow banking system casts some doubt about the degree of control the People’s Bank of China has on the overall financing system.”

Like America, China needs a reset. But in China’s case that means a move toward more domestic consumption and less reliance on exports and bubble-driven building. Rebalancing toward more consumer goods, health-care products for an aging population and energy efficiency might even open opportunities for imports — if China played by Western trade rules (the report doesn’t address that).

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December 7, 2011 at 10:00 AM

Gates glowing with optimism about nuclear power for China

Here’s the “hmmm” story of the day: Microsoft co-founder Bill Gates is in China discussing jointly developing with Beijing a “new and safer” nuclear reactor. “All these new designs are going to be incredibly safe,” Gates told the audience in China, according to the Associated Press. “They require no human action to remain safe at all times.”

Now hold your Terminator jokes about “Skynet became self-aware…” Same with Homer Simpson humor. According to the AP, Gates said he has mostly funded TerraPower, a Bellevue-based company that is working on a fourth-generation nuclear reactor that can run on depleted uranium. “TerraPower says it has discussed its plans with India, Russia and other countries with nuclear energy programs.”

What is unanswered is how such a reactor would perform in the aftermath of the lessons still being learned from the meltdown of the Fukushima Daiichi nuclear power plant in Japan? That event’s dire details, still coming out, have been swamped by more important news, such as Kim Kardashian’s wedding and divorce.

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