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China's economic problems greater than reported

May 25 2012 at 6:49 PM

WAFFer  (Login AryanArya)
Satyameva Jayate (India)

http://www.cbsnews.com/8301-505123_162-57437934/chinas-economic-problems-greater-than-reported/

China's economic problems greater than reported

May 21, 2012 8:25 AM

By Constantine von Hoffman

(Money Watch) Home prices in China continued to decline last month, according to official statistics, despite two years of government efforts to stabilize them. This is just one of many indicators that the world's second largest economy is feeling the impact of the bursting of the nation's real estate bubble.

A government survey of average prices in 70 cities released last week showed prices declined in 46 cities and rose in just three. For the month, 43 cities showed declines in prices compared to March, while 46 cities showed declines on a year-on year basis, according to the National Bureau of Statistics.

A new report by Patrick Chovanec, associate professor at Tsinghua University's School of Economics and Management in Beijing, lays out the picture in stark terms:


Year-on-year sales in the first quarter of 2011, for all real estate, were down 14.6 percent.
Residential property sales were down 17.5 percent
Office sales were down -10.2 percent
Sales in January-February fell 20.9 percent overall, -24.7 percent for residential.
Total amount of floor space "for sale" was up 35.5 percent, compared to the same date last year
Floor space of residential units "for sale" grew 47.4 percent.
At the end of 2011, total floor space "under construction" was roughly 4.6 times the floor space sold
A year and a half worth of excess inventory is hidden somewhere in the pipeline
In April, starts for all types of real estate fell 14.6 percent year-on-year and 27 percent month-on-month
Housing starts fell -14.4 percent year-on-year and -23.4 percent month-on-month
Office starts fell -21.0 percent year-on-year in April, and -45.1 percent compared to March
Retail property starts fell -18.7 percent year-on-year, and -36.8 percent compared to March
Land sale revenues in April were down -54.7 percent compared to April last year
Foreign funding for property development was down -91.4 percent in March and -80.8 percent in April, compared to the same months last year.


It is almost certain the situation is worse than reported. China is notorious for the inaccuracy of its economic statistics. Li Keqiang, who is expected to be the nation's next premier, told the U.S. ambassador that the official gross domestic product figures are "man-made" and that he regarded them as being "for reference only." Last week, China reported that its GDP growth for the second quarter of the year would likely slow to 7.5 percent. Whether or not this is a reliable number, it is still sharply off the 8.9 percent GDP growth claimed by the government for that last three months of 2011.

Other business indicators would seem to confirm that the economic slowdown is greater than reported. Total vehicle sales in China were down 1.3 percent in the January-to-April period, the worst showing since 1998 when deliveries fell 1.6 percent, according to data compiled by the China Association of Automobile Manufacturers. The association also reported that many of its members were carrying more than 45 days of inventory at the end of April. This is already causing severe price cuts and has meant several automobile factories have had to stop production for a period.




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Krinvanto Vishwam Aryam
(Make this World Noble)

- Rigveda


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AryanArya
(Login AryanArya)
Satyameva Jayate (India)

Re: China's economic problems greater than reported

May 25 2012, 6:55 PM 

http://www.abc.net.au/news/2012-05-24/manufacturing-slows-in-china-says-hsbc/4031434

Chinese manufacturing sector keeps shrinking

May 24, 2012

The manufacturing sector in China contracted for the seventh consecutive month in May as exports deteriorated, according to a survey by HSBC.

HSBC's preliminary purchasing managers index (PMI), which measures factory output, fell to 48.7 in May from 49.3 in April, the bank said in a statement.

A reading above 50 indicates expansion in the sector, while a reading below 50 suggests contraction.

HSBC chief economist for China Qu Hongbin said the worsening picture for the world's second-largest economy meant Beijing would have to do more to boost growth, on top of existing infrastructure investment and liquidity easing measures.

The bank will release full-month data on June 1.

"This calls for more aggressive policy easing, as inflation continues to slow," Mr Qu said.

"Beijing policymakers have been and will step up easing efforts to stabilise growth.

"As long as the easing measures filter through, China will secure a soft landing in the coming quarters."

While there are fears that a slowdown in China will hit Australian exporters, particularly in the resources sector, HSBC Australia chief economist Paul Bloxham sees China's economy improving soon as the government steps in to boost growth.

"We have in mind that growth stabilises and picks up a little bit in the second half, which will be a positive development for Australia," Mr Bloxham said.

"Of course the big risk at the moment is really what's happening in Europe, and of course that could have big ramifications for China and for Australia as well, and we are all watching Europe very closely."

China's government has set a target of 7.5 per cent economic growth this year. The economy grew 9.2 per cent last year and 10.4 per cent in 2010.

Earlier this month, the government cut banks' required reserve ratio, freeing up funds they can lend to clients, after unexpectedly low figures for April, with exports up just 4.9 per cent year-on-year and imports virtually flat from a year earlier.

HSBC's manufacturing figures are typically more pessimistic than China's official numbers.

The HSBC survey puts more emphasis on smaller companies, which are suffering more in the economic downturn than state-owned giants.

Small companies have a harder time securing funding from banks, and they are also typically geared towards foreign markets, so a slowdown in exports hits them harder.






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[linked image]

Krinvanto Vishwam Aryam
(Make this World Noble)

- Rigveda


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[linked image]

 
 

(Login w00tness)
Satyameva Jayate (India)

Re: China's economic problems greater than reported

May 29 2012, 4:45 AM 

LOL..thats what happens when your gdp growth relies more on government spending on unnecessary infrastructure. Aims for annual growth of 10% in exports and imports this year and is running far short of both. The first four months of 2012 saw exports grow 6.9% on the previous year while imports grew 5.1%...

Can hardly wait for the incoming real estate crash in China

Soopapawa!


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Tu hai nadee o bekhabar
Beh chal kahin ud chal kahin
Dil khush jahan teri toh manzil hai wahin.

 
 
Hawkssss
(Login Hawkssss)
Elite WAFF Vet Club

Re: China's economic problems greater than reported

May 29 2012, 5:18 AM 

lol, shouldn't indians be worrying about your own pathetic economic situation than being jealous of China? lo1l1o

them indians.....l11ol1o1l11ol1o1l1

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WAFFer
(Login zergcerebrates)
Middle Kingdom (China)

Re: China's economic problems greater than reported

May 29 2012, 6:04 AM 



One thing people seem to forget is China's resilience and its ability to adapt quickly. This economic slowdown was created by the Chinese government to prevent the property bubble, inflation, bad loans, and the overheated economy. True weak exports contributed to some of it but the majority of the problem was government intervention. Well it worked, but now its slowing down more than they wanted and government is going to allocate billions of dollars into infrastructure, ease lendings, and boosting domestic consumption. Theres no such thing as building too much infrastructure or useless infrastructure as someone here would suggest. Improving railways, airports, highways, ports, bridges will boost economic development as they are all interrelated causing a domino effect throughout every sector. It has worked in the past and will work again.

 
 

(Login oneman28)
WAFFer

Re: China's economic problems greater than reported

May 29 2012, 1:02 PM 

China has been trying to colling the property market for several years. Although China is easing the policies, Chinese banks' reservation requirement is still above 20%. http://en.wikipedia.org/wiki/Reserve_requirement Much higher than India's.

When China's inflation and property market are under control, CHina has a lot of space to improve the economy situation.

While, India's economical situation is very pathetic now, isn't it?

 
 

AryanArya
(Login AryanArya)
Satyameva Jayate (India)

Re: China's economic problems greater than reported

May 30 2012, 7:06 PM 

China's share of investment is today around 50% of its GDP ! This much of over capacity buildup has pulled down the return on capital and eventually led to the pile up of bad loans in the chinese banking system. Instead of rebalancing their economy, they are again talking about new stimulus and starting yet more infrastructure projects to stimulate growth ! LOL ! Compared to India, china definetly have more options to fight the slowdown but its like comparing apples with oranges since the problems are fundamentally different. Both India and China have problems but unlike chinese who tend to laugh at Indians while their own house is also burning, Indians are keeping their feet on the ground.

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[linked image]

Krinvanto Vishwam Aryam
(Make this World Noble)

- Rigveda


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[linked image]

 
 
Hawkssss
(Login Hawkssss)
Elite WAFF Vet Club

Re: China's economic problems greater than reported

June 1 2012, 3:37 AM 

blah, blah, china this and china that.....take a look at your own pathetic economy which may lose its hard-won investmnet grade soon to become a junk graded soverign that it should be in the first place....l1o1l1o1l1o1l

them pathetic indians..ll1o1l1o1l11o1l1o1l1

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AryanArya
(Login AryanArya)
Satyameva Jayate (India)

Re: China's economic problems greater than reported

June 1 2012, 1:47 PM 

Why dont you look at your own pathetic economy while we look at ours ? China finds itself damned if it inflates and damned if it deflates.

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[linked image]

Krinvanto Vishwam Aryam
(Make this World Noble)

- Rigveda


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[linked image]

 
 
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