You have to go back to the dark days of the 2009 Great Recession to unearth figures such as these. In yet another sign that China’s economy is cooling, GDP growth came in at an anemic 6.5% in the third quarter, the slowest rate of expansion for nine years.
Battered by the trade war and the clampdown on corporate and local government debt, the world’s second-largest economy is also struggling with a meltdown in the markets.
“There are still many unknowns with China-US trade frictions, so the economy will face some downward pressure,” Mao Shengyong, a spokesman for the National Bureau of Statistics, said on Friday.
Despite tumbling from 6.8% and 6.7% in the previous two quarters, the number was still in line with Beijing’s target for the year.
Moreover, this latest snapshot of the economy was released just a week after China’s exports unexpectedly jumped last month with firms front-loading shipments to dodge tariffs on more than US$250 billion worth of imports into the United States.
Politically sensitive
The politically-sensitive surplus with the US was also a staggering $34.13 billion, which surpassed August’s record of $31.05 billion.
“Front-loading impact is quite obvious,” Betty Wang, a senior China economist at ANZ in Hong Kong, said at the time. “If that’s the case then I think further downside risk can be expected in the fourth quarter.”
What is not in doubt is that stronger export figures will only exacerbate the dispute between the two economic superpowers.
They also tend to gloss over a mixed picture of business stats. Last month, factory output growth was a sluggish 5.8% compared to the same period a year earlier.
Yet fixed-asset investment expanded at a slightly faster-than-expected 5.4% in the first nine months of the year. Still, the factory output reading was the weakest since February 2016.
“While export growth picked up last month, industrial production slowed, underscoring the downward pressures on growth for the rest of the year,” Oxford Economics analysts said in a statement on its website.
During the summer, China’s economy showed signs of stalling with manufacturing profits slowing for four consecutive months. Mainland markets have also fallen to levels not seen since 2015 with nearly $3 trillion wiped off the Shanghai Composite Index in the past six months.
Business confidence
All this has come at a time when business confidence has dipped significantly.
“We expect a further escalation of US-China trade tensions going into 2019, which will likely be partially offset by yuan adjustment and more growth-supportive fiscal and monetary policies,” economists, led by Zhu Haibin, at investment bank JPMorgan Chase said in a note.
“We expect fiscal and monetary policies to become more growth-supportive, providing a lift to headline GDP growth.”
Analysts and economists are even predicting that this loss of momentum could bring the curtain down on Beijing’s fiscal tightening policy. Others are not so sure.
“The worst is yet to come,” Kevin Lai, an economist at investment bank Daiwa Capital Markets, said in a note to clients.
What a sobering thought.
Nothing Burger rummaging through this and that for a fig leaf to cover exaggeration and hyperbole.
"Despite tumbling from 6.8% and 6.7% in the previous two quarters, the number was still in line with Beijing’s target for the year."
["tumbling" from 6.5%]
"The worst is yet to come" may or may not be true. But it certainly isn’t in this article.
Nothing Burger rummaging through this and that for a fig leaf to cover exaggeration and hyperbole.
"Despite tumbling from 6.8% and 6.7% in the previous two quarters, the number was still in line with Beijing’s target for the year."
["tumbling" from 6.5%]
"The worst is yet to come" may or may not be true. But it certainly isn’t in this article.
This article is mostly hyperbole and myopic.
Going from a growth rate of 6.8% to 6.5% is not very significant. Yes, there is a trade war on and the US is adding tariffs in its attempt at bring manufacturing back from China to it’s shores (along with other reasons). Who doesn’t expect ups and downs in the economy during such times?
But instead of looking at the last 30 to 90 days of data, it is much better to take a bit longer term view. Did not Mr. Watts not post an article just 90 days ago that the IMF predicted “China’s near-term outlook remains robust due to strong domestic momentum, recovering global trade and significant reform progress.”.
And what about the US economy?
The President of the Dallas Federal Reserve recently stated: “It is our view and it’s my view at the Dallas Fed that we’re at the height of the impact of the stimulus right now, the fiscal stimulus. That will fade somewhat in ’19 and will fade further in ’20 and you still got some headwinds, sluggish labor force growth because the demographics [of] aging and sluggish productivity, those will start to kick in more as the fiscal stimulus fades,”. See: https://www.marketwatch.com/story/fed-official-the-fleeting-impact-from-trumps-stimulus-is-at-its-height-right-now-2018-09-07
Or the clairvoyant Noureil Roubini recently stated that not only was the US stimulus poorly timed, but gave as his number one reason for a potential significant downturn in the US economy, "First, the fiscal-stimulus policies that are currently pushing the annual U.S. growth rate above its 2% potential are unsustainable. By 2020, the stimulus will run out, and a modest fiscal drag will pull growth from 3% to slightly below 2%."
Now compare that with China’s 6.x% plus or minus growth rate. So who is on the right track and who is not?
This article is mostly hyperbole and myopic.
Going from a growth rate of 6.8% to 6.5% is not very significant. Yes, there is a trade war on and the US is adding tariffs in its attempt at bring manufacturing back from China to it’s shores (along with other reasons). Who doesn’t expect ups and downs in the economy during such times?
But instead of looking at the last 30 to 90 days of data, it is much better to take a bit longer term view. Did not Mr. Watts not post an article just 90 days ago that the IMF predicted “China’s near-term outlook remains robust due to strong domestic momentum, recovering global trade and significant reform progress.”.
And what about the US economy?
The President of the Dallas Federal Reserve recently stated: “It is our view and it’s my view at the Dallas Fed that we’re at the height of the impact of the stimulus right now, the fiscal stimulus. That will fade somewhat in ’19 and will fade further in ’20 and you still got some headwinds, sluggish labor force growth because the demographics [of] aging and sluggish productivity, those will start to kick in more as the fiscal stimulus fades,”. See: https://www.marketwatch.com/story/fed-official-the-fleeting-impact-from-trumps-stimulus-is-at-its-height-right-now-2018-09-07
Or the clairvoyant Noureil Roubini recently stated that not only was the US stimulus poorly timed, but gave as his number one reason for a potential significant downturn in the US economy, "First, the fiscal-stimulus policies that are currently pushing the annual U.S. growth rate above its 2% potential are unsustainable. By 2020, the stimulus will run out, and a modest fiscal drag will pull growth from 3% to slightly below 2%."
Now compare that with China’s 6.x% plus or minus growth rate. So who is on the right track and who is not?
Harvard professor Graham Allison recently stated in an interview that China’s economy, measured by purchasing power parity (which is the gold standard for comparing economies), is 1.25X the size of the U.S. economy. And it is still growing at 6.5%, which the U.S. economy couldn’t do on it’s best day. If this is a sign that China’s economy is "slowing down" then U.S. growth shows that it’s economy is "dead."
Harvard professor Graham Allison recently stated in an interview that China’s economy, measured by purchasing power parity (which is the gold standard for comparing economies), is 1.25X the size of the U.S. economy. And it is still growing at 6.5%, which the U.S. economy couldn’t do on it’s best day. If this is a sign that China’s economy is "slowing down" then U.S. growth shows that it’s economy is "dead."
such marginal falls in per centage rates in quarter-wise figures do not signify any trend. Moreover, a trend decline is normal as the absolute size of the economy grows. China has nothing to fear from the USA actions – it should use the opportunity to IMPROVE the living conditions of its OWN PEOPLE>
such marginal falls in per centage rates in quarter-wise figures do not signify any trend. Moreover, a trend decline is normal as the absolute size of the economy grows. China has nothing to fear from the USA actions – it should use the opportunity to IMPROVE the living conditions of its OWN PEOPLE>
WuKong Sun Small weapons, large debt = China
WuKong Sun Small weapons, large debt = China
Hmmmmmm lets see now. China is on the verge of economic collapse with a paltry 6.5% growth in GDP and a real disaster in industrial output at just 5.8%-. But the US economy is booming at an increase in GDP to 4.2% based on just one quarter measurment.
Should the US ever have a 6.5% increase in the GDP over a single year we would be smothered in glowing reports of the bennefits of Capitalism. But China? They suffer a 1/10 of 1% decline to a whopping 6.5% growth figure and the Grim Reaper is at the door.
WHAT IN THE WORLD IS WRONG WITH THIS PICTURE?
Hmmmmmm lets see now. China is on the verge of economic collapse with a paltry 6.5% growth in GDP and a real disaster in industrial output at just 5.8%-. But the US economy is booming at an increase in GDP to 4.2% based on just one quarter measurment.
Should the US ever have a 6.5% increase in the GDP over a single year we would be smothered in glowing reports of the bennefits of Capitalism. But China? They suffer a 1/10 of 1% decline to a whopping 6.5% growth figure and the Grim Reaper is at the door.
WHAT IN THE WORLD IS WRONG WITH THIS PICTURE?
6.5%?!!! OMG!!!! The sky is falling down for China, says Gordon ‘Chicken Little’ Watts. Ha ha ha ha hah!
6.5%?!!! OMG!!!! The sky is falling down for China, says Gordon ‘Chicken Little’ Watts. Ha ha ha ha hah!
The anti China propaganda is just like that: if China grows in one Q by less than 0.1% is a total disaster by the anti China propagandist: If US does not grow at all, that is ok and not a disaster according to the anti China propaganda.
The anti China propaganda is just like that: if China grows in one Q by less than 0.1% is a total disaster by the anti China propagandist: If US does not grow at all, that is ok and not a disaster according to the anti China propaganda.
If any place China would target Taiwan couldn’t find any spyware that means all the fake news is just that, fake. Show some evidence or stop spreading rumors. It’s put up or shut up time.
If any place China would target Taiwan couldn’t find any spyware that means all the fake news is just that, fake. Show some evidence or stop spreading rumors. It’s put up or shut up time.