China doubles down on coal production

<p>Kia ora,</p><p>Welcome to Wednesday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the Evergrande contagion seems to have started.</p><p>But first up today we should note that the overnight <a href="https://www.globaldairytrade.info/en/product-results/" target="_blank"><strong>dairy auction</strong></a> brought no overall change in prices in USD terms, and a small +0.5% gain in NZD terms as there has been a small depreciation in the Kiwi dollar since the last event. This overall result was less than expected. It seems that food isn't really participating in the current rise in commodity prices. (Although we should also note that the <a href="https://tradingeconomics.com/commodity/palm-oil" target="_blank"><strong>price of palm oil</strong></a> has reached a new record high, giving very unfortunate price signals for an industry that does much environmental damage.)</p><p>And speaking of economic signals for environment damage, Beijing has <a href="http://www.cbirc.gov.cn/cn/view/pages/govermentDetail.html?docId=1011374&itemId=861&generaltype=1" target="_blank"><strong>ordered</strong></a> its banks to ramp up funding for thermal coal production. Just three days of China's CO2 emissions are more than New Zealand's annual CO2 emissions so by this order they have probably cancelled out any gains we make for the period to 2030. (Interestingly, the renewed focus on building thermal coal reserves does not extend to China buying Australian coal.)</p><p>China may be on holiday this week, but dominos seem to be falling in the Evergrange saga. <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1004/2021100403417.pdf" target="_blank"><strong>Other property development businesses are missing payments</strong></a>, and some lenders are struggling to control the fallout.</p><p>In the US, the <a href="http://www.the-lmi.com/september-2021-logistics-managers-inde