General Commentary: Has the Bull in the China Shop Met His Matador?

Happy, productive stamp collectors heroically marching
together on a single path to a glorious philatelic utopia
(JK)

Since October of 2010, the People's Bank of China has raised interest rates five times in an effort to combat inflation. This tightening of monetary policy has led to a deceleration of economic growth in the P.R.C., and has been a factor in the global economic recession.

There have been reports that this deceleration of growth has also dampened prices for Chinese collectibles, including stamps, that the once white-hot P.R.C. stamp market has cooled somewhat, and that dealer buy prices for many items have dropped by 20%-30%.

In a March, 2010 StampSelector blog article ("General Commentary - the Bull in the China Shop"), I commented on the dramatic price increases for P.R.C. material, and noted buy prices for several souvenir sheets and Cultural Revolution issues. I've re-listed these items below, along with current buy prices.

(Prices are for VF NH)

1958 Kuan Han-ching s/s (Scott #357a):

2004: $ 65.00
2006: $ 75.00
2007: $ 85.00
2008: $ 130.00
March, 2010: $ 215.00 ; April, 2010: $ 340.00
September, 2011: $ 650.00
January, 2012: $660.00

1961 Table Tennis s/s (Scott #566a):

2004: $ 180.00
2206: $ 225.00
2007: $ 225.00
2008: $ 275.00
March, 2010: $ 800.00; April,2010: $ 1,180.00
August, 2011: $ 1,500.00
January, 2012: $ 1,400.00


1962 Mei Lan-fang s/s (Scott #628):

2004: $ 1,800.00
2006: $ 2,500.00
2007: $ 3,000.00
March, 2010: $ 10,000.00; April, 2010: $ 11,000.00
August, 2011: $ 25,000.00
January, 2012: $ 25,000.00

1964 Peonies s/s (Scott #782):

2004: $ 400.00
2006: $ 500.00
2007: $ 500.00
March, 2010: $ 2,000.00; April, 2010: $ 3,650.00
August, 2011: $ 3,750.00
January, 2012: $ 4,100.00

1967 Thoughts of Chairman Mao- unfolded strip of 5 (Scott #948a):

2004: $ 325.00
2006: $ 750.00
2007: $ 750.00
March, 2010: $ 2,500.00; April, 2010: $ 3,300.00
August, 2011: $ 5,000.00
January, 2012: 8,000.00


1967-68 Poems by Chairman Mao (Scott #967-80):

2004: $ 475.00
2006: $ 800.00
2007: $ 800.00
2008: $ 1,300.00
March, 2010: $ 2,200.00; April, 2010: $ 3,000.00
September, 2011: $ 4,275.00
January, 2012: $ 5,350.00

1968: "The Entire Nation is Red" (Scott #999A):

2004: $ 8,000.00
2006: $ 10,000.00
2007: $ 10,000.00
March, 2010: $ $ 60,000.00; April, 2010: $ 75,000.00
September, 2011: $ 150,000.00
January, 2012: $ 170,000.00

1978 Science Conference s/s (Scott #1383a):

2004: $ 140.00
2006: $ 150.00
2007: $ 160.00
March, 2010: $ 400.00; April, 2010: $ 490.00
August, 2011: $ 550.00
January, 2012: $ 540.00

1979 Study Science s/s (Scott #1518):

2004: $ 300.00
2006: $ 510.00
March, 2010: $ 1,600.00; April, 2010: $1,950.00
August, 2011: $ 2,350.00
January, 2012: $ 2,300.00

1980 Year of the Monkey (Scott #1586):

2004: $ 100.00
2006: $ 215.00
2007: $ 200.00
March, 2010: $ 800.00; April, 2010: $975.00
August, 2011: $ 1,600.00

January, 2012: $ 1,550.00

According to my sampling, the buy prices for the key items selected remain very strong, but it is possible that this selection of key items is not representative, or that it doesn't take into account fluctuations which may have occurred on a shorter term basis, or during months for which buy prices were not noted. A few items seem to have stabilized or declined slightly, while others continued to increase in value.

My view is that if there has been a dampening in the P.R.C. stamp market, it will prove to be a temporary phenomenon, assuming that the market's fundamentals aren't undermined by extreme political instability. The key items of the P.R.C. may soar more rapidly skyward, like an awakened dragon, after China's monetary policy is relaxed. For those who wish to take a more conservative approach, I recommend focusing on better items of Imperial China and foreign offices in China, which have increased more steadily over time.

In the long run, the 64 million yuan question will be whether the P.R.C. will be able to maintain a politically and socially stable society in the midst of dramatic social and economic change. It is likely that the government will manage to succeed in its traditional policy of balancing repression and gradual reform, but if the economy falters and expectations of future growth are dashed, then, to paraphrase Robert Graves, all of the poisons which lurk in the mud could hatch out.