China’s economy expanded at its worst pace in 24 years last year (7.4%). It’s been a rough 18 months for our friends in Beijing. They were happy to take the last week off and say goodbye to the year of the horse, which has left a big Charlie horse on their economy’s figurative leg. The weeklong Lunar New Year Celebration ushered in the year of the sheep. Or, if you prefer a different translation, the year of the goat.
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This is appropriate because China has been the scapegoat for everything that’s wrong with our metal markets. China’s shadow banking sector was blamed for falling copper prices last year. China’s rare earths export quota policy was blamed by the World Trade Organization for protectionist pricing, scarcity of rare earths and increasing prices for years until China finally gave in and lifted the quotas at the end of last year.