The World Bank’s jarringly blunt warning that the global economy faces a crisis that’s possibly more dangerous than the global financial crisis set in motion a wave of negative analyses, many of them very difficult to ignore. The scariest prospect for Australia is China falling over, but The Australian’s Michael Sainsbury has stumbled upon an important symbolic milestone for the Chinese economy. Quite simply, less people are living in the sticks. Another commentator encourages investors not to accept clichd answers to economic data fluctuations, while the Productivity Commission’s advisory role on superannuation rewards also comes up for discussion.
But first we start with The Australian’s Michael Sainsbury, who noticed this useful Chinese landmark.
"During the week, a remarkable milestone was passed: the number of Chinese people living in urban areas overtook the number of people living in rural areas. This is testament to remarkable years of opening up and reform, a project with a profound effect on the world and on Australia, underpinning a longer mining boom and a stretch of prosperity straddling decades rather than years. The announcement is encouraging, particularly in a global economy now at high risk of moving back into a recession that could be even worse than that of 2008-09, according to the World Bank's semi-annual economic outlook report issued on Wednesday."
With investors looking deeper into the data for some hint of where to put their money or when to move into cash, the Sydney Morning Herald’s Michael Pascoe forcefully reminds readers not to jump at shadows. He uses the flat employment figures for 2011 as an example when, after stellar growth in 2010, it would have been typical for a small retreat.
"The immediate explanation for that is that our participation rate, the percentage of people either working or looking for work, fell from 65.9 to 65.4. And, in turn, the usual knee-jerk explanation for that is 'disenchanted job seekers' - people who give up looking for work when jobs are harder to find. But there are more complicated factors. Lower net overseas migration, young people tending to stay in education for longer and that baby boomer bulge starting to retire all play a role. And then there's a simple reaction in 2011 to what had been a most impressive 2010, when confidence was returning after the GFC wobbles.”
Meanwhile, The Australian’s John Durie has taken a look at Financial Services Minister Bill Shorten’s request for the Productivity Commission to advise Fair Work Australia on superannuation awards.
"The responses are to be framed as ways in which the government can advise Fair Work Australia how it should consider superannuation in award determinations. That is a long way from what Jeremy Cooper had in mind when he sought changes to the system that allows industry awards to nominate industry funds as the default supply of superannuation. If the retail funds were hoping the PC review would result in an automatic end to that system, they will be disappointed for some obvious reasons.”
Sticking with local news for the rest of this morning’s business commentaries, The Australian’s Robin Bromby wades into the murky world of commodity price forecasting. His colleague Glenda Korporaal looks at the growing deposit book of National Australia Bank’s online vehicle UBank.
Meanwhile, The Australian Financial Review’s Chanticleer columnist Tony Boyd finds the Australian Securities and Investments Commission making inroads against white-collar criminals. Fairfax’s Ian McIlwraith takes a look at the latest attempt by Coles to take opportunistic Australia Day sales to a whole new level.
And finally, the Herald Sun’s Terry McCrann tries to reconcile the torrential amount of bad news coming out of Europe and the persistent stream of ‘smart money’ flowing into risky assets.