In the largest metals market in the world, a new year has dawned and many are asking what it holds for consumption and prices.
The year of the water dragon is auspicious for a number of reasons. As the only mythical beast among the 12 animals in the Chinese zodiac, it is supposed to bring unpredictability and change, an FT article explains. Previous dragon years have included the death of Mao Zedong in 1976, the official end of the Cultural Revolution and the worst earthquake in Chinese history at Tangshan that killed hundreds of thousands of people.
Supposedly the dragon year of 1988 set the scene for both the fall of the Soviet Union and the 1989 Tiananmen Square uprising the following year – or it could just be the dragon’s timekeeping was off. So with such a track record, it may not be so bizarre that many Chinese have sorted out the prophecy of the Abbott or resident master at a Buddhist temple outside Suzhou, who apparently has a pretty impressive track record in foretelling what the year ahead holds.
The World Ends in 2012, Right?
So what does the oracle have to say about 2012?
Well, if you were hoping for a quick resolution to the European debt crisis, he is set to disappoint you. There are more “storms” coming for Europe, he is reported to say, and unfortunately, for the US, too. Not that the old sage seems to hold any pleasure in his view; the knock-on impact for China will not be good, he says, hitting exports and prompting him to suggest quite a few export-orientated Chinese factories will go bust.
Interestingly, he did not jump on the obvious bandwagon and predict a collapse of the already sliding Chinese property market. Maybe he has been reading MetalMiner, but certainly he agrees with us that while further falls are possible, stagnation is more likely than an outright crash – which is just as well, since, as the FT points out, local government and banks have a mountain of property-related debt that the economy can ill afford to turn bad.
He is more critical of stock market investors (possibly his own portfolio has not been doing too well), saying, “The Chinese stock market and stock investors are like little children playing with toys – there are no rules and it is very immature and this year will be especially inauspicious” — we take “inauspicious” is a way of saying “anyone with too much money tied up in the Chinese stock market may like to think about getting out now.”
To what extent Beijing consults the abbott in making policy for the year ahead is not clear, but surely they will be looking for a smooth transition for Xi Jinping to take over from current President Hu Jintao at the end of this year.
All the stops will be pulled out to ensure that process appears to be seamless and ordered to the world at large, and every effort will no doubt be made to ensure the master is right and the property market does not implode as some fear – that would certainly be an “inauspicious” start for the new president.