Pension funds have become increasingly active investors in commodities, and the growth in the quantum of funds invested has been truly spectacular.

This announcement is certainly consistent with China's tougher (more disciplined) stance in the iron ore contract negotiations.

It appears the Chinese government is now trying all it can to slow down iron ore imports and control spot prices during the negotiations.

A pattern of growth that was heavily skewed towards household spending was not going to be able to continue indefinitely, and the balance-sheet adjustment now occurring in the household sector should reduce the risk of a sharper adjustment later.

We remain overweight on the global growth proxies of Taiwan, [South] Korea and Singapore.

For most companies, cost reductions and cutbacks have done little to fuel real growth in either sales or revenues. Increasing worker productivity and innovation represent the best paths to business growth.