China growth slowing

[tigerbob]

Get ready for a hard landing

China Manufacturing Growth Slows

BEIJING—In a signal that the world's second-largest economy hasn't bottomed out, China's manufacturing activity last month grew at the slowest pace since November.


The official manufacturing Purchasing Managers Index fell to 50.2 in June from 50.4 in May, the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics, said in a statement Sunday. A PMI reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 indicates contraction.

The June figure exceeded market expectations—the median forecast of 11 economists polled by Dow Jones Newswires was 49.8—but economists said the reading wasn't promising, as subindexes for new orders, exports and imports all painting gloomy pictures. The new-orders subindex fell to 49.2 last month from 49.8 in May, while new export orders slipped into contraction territory at 47.5, down from 50.4. The imports subindex was at 46.5 in June, down 1.6 points.

"I am pessimistic about the exports situation in the second half-year, as the euro zone will step into recession," said Citi economist Ding Shuang said, adding that he expects both exports and imports to creep higher by single digits monthly for the rest of this year and for the year as a whole.

China Manufacturing Growth Slows - WSJ.com

 

[Moonglow]

Yes, the Chines and Indians have reduced gas and other energy orders, which is one reason gas in the USA is down $3.03 in Neosho, missouri

 

[johngray123]

Man power is more in China and India so we can say that they are growing country.

 

[Douger]

Maybe it's time for them to call in that loan ?

 

[editec]

Their largest customer's economy is on the fritz, so it stands to reason that CHINA Inc. economy will likewise suffer.

As to them "calling in the loans"?

That isn't the nature of the debt instruments they have.

 

[waltky]

Chinese economy not bein' able to keep up its recent phenomenal growth...

China's shrinking economy
August 17, 2012 - They did it again. Beijing’s economic statistics for July, issued last week, appear to have been “made up,” as the Chinese now characterize fictitious numbers. One figure, whether accurate or not, was especially illuminating. Last month, the production of electricity, according to the National Bureau of Statistics, increased 2.1% year-on-year.

There is growing evidence that officials have been artificially inflating the closely followed electricity number to make the economy appear stronger than it actually is, but even a 2.1% increase indicates China has flatlined. Why? Historically, the growth of electricity in that country has outpaced the growth of its gross domestic product, the most widely followed measure of economic performance.

The conclusion that China’s economy is probably shrinking is confirmed by manufacturing surveys and prices indexes, but the most telling indicators are the mountains of unneeded commodities. Copper in recent months has been stockpiled in parking lots, and iron ore has been stored in granaries. Ships loaded with unwanted coal have been waiting off Chinese ports. That’s why China analysts are talking about the “heart attack” economy, and Anne Stevenson-Yang of J Capital Research uses the phrase “rigor mortis.”

Most analysts, however, don’t worry. They believe China’s problems are temporary and will soon be forgotten because the country is in a supercycle upwards. They’re wrong. After 35 years of virtually uninterrupted growth, China has hit an inflection point. The three primary reasons that created more than three decades of growth either no longer exist or are disappearing fast. The country is no longer reforming, the international environment is not benign, and the “demographic dividend”—an extraordinary bulge in the workforce—is turning into a demographic bust.

It is in this adverse context—not the favorable one of the last three decades—that Chinese leaders will have to act. In other words, they will no longer be propelled by trends; going forward, they will have to succeed in spite of them. Unfortunately for them, Chinese leaders cannot do what is necessary to jumpstart growth. Everyone agrees they have to stimulate domestic consumption—the investment-led, export-heavy model is unsustainable.

More China's shrinking economy | Fox News

 

[Thomas152]

China is the main country in Asia because it has fastest growing rate in their region. Main reason of this feature is due to man power. In China cheap labor hiring, less expensive but have more output.

 

[waltky]

China economy losin' steam...

China's new leaders face tough economic choices
Oct 21,`12 -- China's economic model that delivered three decades of double-digit growth is running out of steam and the country's next leaders face tough choices to keep incomes rising. But they don't seem to have ambitious solutions. Even if they do, they will need to tackle entrenched interests with backing high in the Communist Party.

The cost of inaction could be high. The World Bank says without change, annual growth could sink to 5 percent by 2015 - dangerously low by Chinese standards. Some private sector analysts give even gloomier warnings. The government's own advisers say it needs to promote service industries and consumer spending, shifting away from reliance on exports and investment. That will require opening more industries to entrepreneurs and forcing cosseted state companies to compete. State banks would have to lend more to private business that is starved for credit.

The ruling party's latest five-year development plan promises reforms in broad terms. Premier Wen Jiabao apologized at a news conference in March for not moving fast enough and vowed quicker action. But many changes could face opposition from China's most influential factions - state companies, their allies in the party, bureaucrats and local leaders. "If the challenge is, can they do radical reform all at once, we know that won't happen because these leaders aren't powerful enough," said Scott Kennedy, director of Indiana University's Research Center for Chinese Politics & Business in Beijing. "They are facing interests which wouldn't possibly allow that to occur."

Also at issue is how much Communist Party leaders are willing to cut back state industry that provides jobs and money to underpin the party's monopoly on power. Li Keqiang is the man in line to lead reforms as the next premier, China's top economic official. Now a vice premier, Li is seen as a political insider with an easygoing style, not a hard-driving reformer. Along with the rest of the party's Standing Committee, the ruling inner circle due to be installed in November, Li will govern by consensus, which could blunt their force. "They are under pressure to change the economy, but they will not demolish party control," said Mao Yushi, an 83-year-old economist who is one of China's most prominent reform advocates. He co-founded the Unirule Institute of Economics, an independent think tank in Beijing.

MORE

See also:

Japanese exports to China fall amid territorial dispute
21 October 2012 - The BBC's correspondent in Tokyo, Rupert Wingfield-Hayes, says exports are down for a fourth consecutive month

Japanese exports to China tumbled in September compared to the previous year, as a territorial dispute between the two countries weighed on the economy.

Exports from Japan declined at their sharpest pace since the aftermath of last year's earthquake and tsunami.

Overseas shipments fell 10.3%, compared to last year, the Finance Ministry said.

Relations between China and Japan have soured in recent weeks.

Islands dispute

 

[waltky]

Granny says, "Dat's right - China `bout to eat our lunch...

China overtaking US as global trader
Dec 2,`12 -- Shin Cheol-soo no longer sees his future in the United States.

The South Korean businessman supplied components to American automakers for a decade. But this year, he uprooted his family from Detroit and moved home to focus on selling to the new economic superpower: China. In just five years, China has surpassed the United States as a trading partner for much of the world, including U.S. allies such as South Korea and Australia, according to an Associated Press analysis of trade data. As recently as 2006, the U.S. was the larger trading partner for 127 countries, versus just 70 for China. By last year the two had clearly traded places: 124 countries for China, 76 for the U.S.

---

EDITOR'S NOTE - This is the first installment in "China's Reach," a project that will analyze China's influence with its trading partners over three decades, and explore how that is changing business, politics and daily life.

---

In the most abrupt global shift of its kind since World War II, the trend is changing the way people live and do business from Africa to Arizona, as farmers plant more soybeans to sell to China and students sign up to learn Mandarin. The findings show how fast China has ascended to challenge America's century-old status as the globe's dominant trader, a change that is gradually translating into political influence. They highlight how pervasive China's impact has been, spreading from neighboring Asia to Africa and now emerging in Latin America, the traditional U.S. backyard.

Despite China's now-slowing economy, its share of world output and trade is expected to keep rising, with growth forecast at up to 8 percent a year over the next decade, far above U.S. and European levels. This growth could strengthen the hand of a new generation of just-named Chinese leaders, even as it fuels strain with other nations. Last year, Shin's Ena Industry Co. made half his sales of rubber and plastic parts to U.S. factories. But his plans call for China, which overtook the United States as the biggest auto market in 2009, to rise fivefold to 30 percent of his total by 2015. He and his children are studying Mandarin. "The United States is a tiger with no power," Shin said in his office, where three walls are lined with books, many about China. "Nobody can deny that China is the one now rising."

MORE

 

[waltky]

China gettin' ready to shoot the moon...

Analysts: China poised for 6 to 7 percent rate of economic growth
Jan. 10, 2018 -- Economists who study China said the world's second-largest economy is poised to grow anywhere between 6.7 to 7 percent in 2018 as consumer sentiment improves and stock markets rally around the world.

Speaking at a National Committee on U.S.-China Relations forum focusing on China's economic outlook, Qin Xiao, the former chairman of China Merchants Group, said the Chinese economy is likely to reach a 6.7 percent annual rate of growth. "China's exports will continue to benefit from a steady global recovery in 2018," Qin said Tuesday, adding Chinese blue chip stocks are in a position to increase in value as economic fundamentals improve this year. Huang Haizhou, managing director of China International Capital Corporation, offered a higher 7 percent rate of forecasted growth, an estimate that might have struck other analysts at the forum as excessively optimistic. Nicholas Lardy, senior fellow at the Peterson Institute for International Economics, said underlying inefficiencies are hampering growth. "Very important legacy issues are slowing down China's growth rate," Lardy said. "We have a situation where 40 percent of state-owned companies can't cover the cost of capital. They're losing money." "There's still a major problem of misallocation of resources."

Beijing's 19th Party Congress also demonstrated mixed commitment to further privatization, according to the U.S. analyst. "Xi's speech was a disappointment for those who were looking for implementations of the third plenary reforms of the 18th Party Congress in 2013," Lardy said. "On the other hand the constitution was revised to include that third plenum language about the market being the decisive force in the allocation of resources." Nearly all analysts agreed China is committed to privatization but still struggling to achieve efficiency. Lu Feng, the director of the China Macroeconomic Research Center at Peking University, said Chinese leaders have clearly indicated the country is moving toward a more market-oriented economy, but issues remain. "China is still transitioning, with legacy from the command economy," Lu said. "Two steps forward one step back, because we are trying to solve the problem of how to make China a more market-oriented model. That is an experiment no one has ever done before."

The 19th Party Congress held in October 2017 demonstrated the Chinese government is committed to privatization, analysts said in New York on Tuesday.​

But Lardy said he sees greater government intervention and an increasingly weak privatization movement linking up in a convergence of trends. "Over the last five years, we've witnessed a greater role for the state, a greater role for state-owned enterprises, more intervention in the economy," he said. "The private sector has weakened over this period." Lardy attributed the trend to government policy that has allowed credit to "flow disproportionately" to state-owned companies, "particularly over the last five years." Chinese authorities undertook the measure in the wake of the 2008 financial crisis, Lardy said, because "this was the quickest way to maintain rapid economic growth." "It was the wrong decision. A lot more growth [could have been achieved] out of the private sector through liberalization," Lardy said. "Returns are so much higher for private firms."

The analyst said the best example of privatization's benefits could be found in the manufacturing sector where private companies account for 80 percent of investment. "State companies are only doing about 10 percent" in manufacturing, he said, an example for other parts of China's economy. "In the service sector the role of state companies is about five times higher, and they have terrible returns, less than 2 percent," the analyst said. "Liberalize the service sector."

Analysts: China poised for 6 to 7 percent rate of economic growth

 

[yiostheoy]

China gettin' ready to shoot the moon...

Analysts: China poised for 6 to 7 percent rate of economic growth
Jan. 10, 2018 -- Economists who study China said the world's second-largest economy is poised to grow anywhere between 6.7 to 7 percent in 2018 as consumer sentiment improves and stock markets rally around the world.

Speaking at a National Committee on U.S.-China Relations forum focusing on China's economic outlook, Qin Xiao, the former chairman of China Merchants Group, said the Chinese economy is likely to reach a 6.7 percent annual rate of growth. "China's exports will continue to benefit from a steady global recovery in 2018," Qin said Tuesday, adding Chinese blue chip stocks are in a position to increase in value as economic fundamentals improve this year. Huang Haizhou, managing director of China International Capital Corporation, offered a higher 7 percent rate of forecasted growth, an estimate that might have struck other analysts at the forum as excessively optimistic. Nicholas Lardy, senior fellow at the Peterson Institute for International Economics, said underlying inefficiencies are hampering growth. "Very important legacy issues are slowing down China's growth rate," Lardy said. "We have a situation where 40 percent of state-owned companies can't cover the cost of capital. They're losing money." "There's still a major problem of misallocation of resources."

Beijing's 19th Party Congress also demonstrated mixed commitment to further privatization, according to the U.S. analyst. "Xi's speech was a disappointment for those who were looking for implementations of the third plenary reforms of the 18th Party Congress in 2013," Lardy said. "On the other hand the constitution was revised to include that third plenum language about the market being the decisive force in the allocation of resources." Nearly all analysts agreed China is committed to privatization but still struggling to achieve efficiency. Lu Feng, the director of the China Macroeconomic Research Center at Peking University, said Chinese leaders have clearly indicated the country is moving toward a more market-oriented economy, but issues remain. "China is still transitioning, with legacy from the command economy," Lu said. "Two steps forward one step back, because we are trying to solve the problem of how to make China a more market-oriented model. That is an experiment no one has ever done before."

The 19th Party Congress held in October 2017 demonstrated the Chinese government is committed to privatization, analysts said in New York on Tuesday.​

But Lardy said he sees greater government intervention and an increasingly weak privatization movement linking up in a convergence of trends. "Over the last five years, we've witnessed a greater role for the state, a greater role for state-owned enterprises, more intervention in the economy," he said. "The private sector has weakened over this period." Lardy attributed the trend to government policy that has allowed credit to "flow disproportionately" to state-owned companies, "particularly over the last five years." Chinese authorities undertook the measure in the wake of the 2008 financial crisis, Lardy said, because "this was the quickest way to maintain rapid economic growth." "It was the wrong decision. A lot more growth [could have been achieved] out of the private sector through liberalization," Lardy said. "Returns are so much higher for private firms."

The analyst said the best example of privatization's benefits could be found in the manufacturing sector where private companies account for 80 percent of investment. "State companies are only doing about 10 percent" in manufacturing, he said, an example for other parts of China's economy. "In the service sector the role of state companies is about five times higher, and they have terrible returns, less than 2 percent," the analyst said. "Liberalize the service sector."

Analysts: China poised for 6 to 7 percent rate of economic growth

6 to 7% is pretty good.

The USA will be lucky to get 3%.