China's slowing economic growth

China is often regarded as the new economic powerhouse. they have a massive, largely untapped consumer base, a government-supported economy, booming housing market. But their economic expansion has slowed considerably over the past few years.

How will this effect the US and world economies?.

A Reuters poll expects China's economic expansion in the second quarter to slip to 7.9 percent, which would mark the sixth consecutive quarter of weakening growth.

China's economic growth is slowing down. This is already beginning to effect world markets.

Factory output in April fell to the lowest level since the 2008 global financial crisis and consumer spending and home sales were weaker than forecast. That jarred hopes China can achieve a "soft landing," with growth rebounding next year.

Economic growth fell to a nearly three-year low of 8.1 percent over a year earlier in the first quarter and is expected to fall further. The World Bank and International Monetary Fund are forecasting growth this year of 8.2 percent.

Private sector analysts say Beijing is likely to move more cautiously in response to this slowdown than it did after the 2008 crisis. Then, a huge stimulus program helped China rebound quickly but fueled inflation and a wasteful building boom.

Government plans call for boosting domestic consumption to reduce reliance on exports and investment to drive growth. Chinese consumer spending is rising but has failed to fill the gap due to weak global demand for exports.

And this slowed growth is already causing problems with global commodities, like coal:

Concerns over China's slowing economy have weighed on global equities and commodities but Mr Wen's comments were the clearest indication yet that Beijing planned to take policy action to stimulate growth.

China is the world's biggest consumer of iron ore, coal and other base metals, but recent data has shown the economy cooling more quickly than expected, with industrial output growth slowing sharply in April and fixed asset investment, a key driver of the economy, hitting its lowest in nearly a decade.

uk.reuters.com...

www.marketplace.org...

www.reuters.com...

Good post. People are underestimating the adverse impacts of slowing growth in China. It's starting to have impacts on Australia already, and will certainly exasperate the global economic slowdown, with a numbe rof countries, particularly in Europe, slowing and contracting. There seems to be converging developments of economic crises in Europe and the world's largest market of global economic growth slowing creating a perfect storm that is going to get painful, less a major crisis happens first then we might be talking system collapse, 2008 all over again but without the policy tools and resources to arrest its demise.

Originally posted by surrealist
Good post. People are underestimating the adverse impacts of slowing growth in China. It's starting to have impacts on Australia already,

I know ive seen a few headlines intimating as much, but I cant say I follow Australian politics/economics much. Can you give some deeper insight?

There seems to be converging developments of economic crises in Europe and the world's largest market of global economic growth slowing creating a perfect storm that is going to get painful, less a major crisis happens first then we might be talking system collapse, 2008 all over again but without the policy tools and resources to arrest its demise.

Indeed. If china implodes, and the EU continues to teeter, I think the US wins the game, right?

Or maybe they all fall and the IMF wins?

You guys have the equation wrong; China and Asia are slowing because the west and the United States is slowing! They grew from selling us consumeristic crap that we don't really need to survive.

Originally posted by Drew99GT
You guys have the equation wrong; China and Asia are slowing because the west and the United States is slowing! They grew from selling us consumeristic crap that we don't really need to survive.

Got what wrong? That is exactly what the articles state. You should actually read the article prior to commenting in the future. It will inform your opinion, making it useful and constructive.

"The current economic slowdown is mainly a result of property tightening measures and weakening global demand, which are the pains China has to face in the process of adjusting its economic structure," the State Information Centre said in a report published in the official China Securities Journal.

uk.reuters.com...

China manufacturing activity worsens in May: HSBC

China's manufacturing activity contracted at a faster pace in May as conditions for exporters worsened during the month, the preliminary findings of a survey by HSBC showed Thursday. The "flash" reading of the manufacturing Purchasing Managers' Index dropped to 48.7 in May from a final print of 49.3 in April, HSBC said. A measure below 50 in the survey indicates deterioration, whereas one above that figure shows an improvement. The flash reading is typically based on 85% to 90% of the total responses in the monthly survey. Hongbin Qu, chief economist for China at HSBC, said the soft data call for more aggressive policy easing, but added that Beijing has been and will further step up "easing efforts to stabilize growth." Mainland Chinese stocks added to gains and Hong Kong shares pared losses immediately after the data, with the Shanghai Composite /quotes/zigman/1859015 CN:000001 +0.12% up 0.3% at 2,370.58, while the Hang Seng Index /quotes/zigman/2622475 HK:HSI -0.47% was down 0.4% at 18,720.81.

sum ting wong

I rekn they are slowing because the west has slowed down significantly in the last 18months. Its caught up.

They might not have as much influence when they too bottom out, but they'll have the cash on hand and a functioning economy.

Where as the US is stupidly broke, malfunctioning and in dire need of revolution.

China will over take even if they continue to over-take,

Originally posted by Agit8dChop
I rekn they are slowing because the west has slowed down significantly in the last 18months. Its caught up.

They might not have as much influence when they too bottom out, but they'll have the cash on hand and a functioning economy.

A functioning economy? Based on what? Your tea leaves? It's essentially a government-supported economy, that once burst, will cause ripples of social unrest throughout China, since the divide between the rich and the desperately poor is an enormous gap.

reply to post by stanguilles7


yes, it flawed.

but its functioning, compared to the US anyway!

reply to post by stanguilles7


Yes, China is slowing, but I haven't formed an opinion on why yet. The United States is actually gaining some of the manufacturing that used to be done in China, I have a thread going about it:

China Losing Manufacturing to the US

I find this topic highly interesting. My father always told me if the US ever got in trouble we'd bring the manufacturing back here....this was years and years ago that he said it, so I'm waiting to see if he is right.

Originally posted by Agit8dChop
reply to post by stanguilles7

 

yes, it flawed.

but its functioning, compared to the US anyway!

How so? Can you substantiate your opinion at all? In what ways is it 'better'?

And, more importantly, what makes you so interested in creating a dichotomy in the conversation between the US and China's economy, when that really isnt the topic at all?

Originally posted by Ameilia
reply to post by stanguilles7

 

Yes, China is slowing, but I haven't formed an opinion on why yet. The United States is actually gaining some of the manufacturing that used to be done in China, I have a thread going about it:

It would appear it i because demand for their products are sipping, as the consumer nations buy less of their stuff now, and also because their completely government-supported housing bubble is imploding.

So, the only difference between methods of control is how many people make decisions and control the cash.
I’m pretty sure China has a few select people in power, just like the US. Just because we call ours democracy doesn’t mean its any different.

You asked how it would affect the US?

At the moment, in my mind, the US, AU and UK are in large part depending on China to keep going strong, because after all those nations are going through significant down turns, with no real answer to the debt problem.

If China grinds to a halt, they are in comparable terms in a much more stronger position than the Western nations. They have cash on hand, new and large infrastructure; they have exports and technological scientists. They can still function as they haven’t started a deep rot yet.

Whereas the west, are in deep rot, deep debt, agit8d populace and no one in charge with any real clue. It doesn’t have much export, mainly because they sold it all to China. There scientists and broad workforce is finding itself out of work putting further finance strain on the west.

China is just as corrupt as the US, but they have kept their focus on internal reserves, on construction. The US took their minds into Iraq, Afghan, Israel and the ME. They still have to pay for this too, their soldiers, their men, and these nations security. China doesn’t have this Burdon.

Its no surprise Chinas slowing down, it will have a negative effect all over the world.

Originally posted by Agit8dChop
.

If China grinds to a halt, they are in comparable terms in a much more stronger position than the Western nations. They have cash on hand, new and large infrastructure; they have exports and technological scientists. They can still function as they haven’t started a deep rot yet.

You perpetuate fantasy. China has an enormous gap between their newly rich and their painfully poverty stricken. Their housing economy is a bubble that would make the US housing bubble look like sound fiscal practice.They only have exports if the rest of the world economy continues to grow. If and when China's economy implodes, they will have so many domestic problems to deal with, they wont have time to worry about the rest of the world.

Part of my point in posting these articles is to disprove the fantasy narrative you are trying to promote that claims that China is the new economic superpower in the world. It's just not true once you begin to look at the finer points of their economy. And quarter after quarter over the past few years we have seen that their eocnomy is sowy down much more than they have predicted. That says a lot.

So get past your anti-American, pro-China prejudices and look at the actual, sobering numbers. China is a

Paper Dragon

.

reply to post by stanguilles7


dude, im not say there isnt a gap, in every nation on earth theres a gap.
Im not saying they are the powerhouse.

but when the decks of cards all collapse, and, its started happening...

china will be in the best position when the dust settles.

Originally posted by Agit8dChop
reply to post by stanguilles7

 

dude, im not say there isnt a gap, in every nation on earth theres a gap.
Im not saying they are the powerhouse.

but when the decks of cards all collapse, and, its started happening...

china will be in the best position when the dust settles.

No, they wont. They have a crap military, and an unruly population with hostile neighbors.

Their entire economy is dependent on the world market, like all other countries. If there is total collapse, they will not emerge on top. Not even close.

How so?

Apart from Tibet, I cant think of a time that China is really involved in political unrest inside its borders.
At least nothing like a riot or public anarchy. Sure they probably keep things quiet, but lets be honest there's nothing ever happening compared to the early throws of Syria, Egypt or even the IRA.

They have a large, young and fit military man power. which is trusted respected by the elite and on that has honour amongst its ranks. They clearly have the cash to supply them.. when the economy goes broke, being paid for being an infantry man isn’t a bad deal. So I imagine they’d have support too.

yeah, you have corrupt leaders.. an a system that ultimately isnt sustainable in the long run, but you have enough gas and ghusto right now, to outlast most other nations. 10, 15, 20yrs maybe you'll conk out too... but China will sit pretty ontop for a little bit.

Originally posted by Agit8dChop
How so?

Apart from Tibet, I cant think of a time that China is really involved in political unrest inside its borders.

Wow. Just wow.

They have a large, young and fit military man power. which is trusted respected by the elite and on that has honour amongst its ranks.

No.

reply to post by Agit8dChop

Apart from Tibet, I cant think of a time that China is really involved in political unrest inside its borders.

Let me help you out with that.....

en.wikipedia.org...

www.google.com... FSB10001424052702304665904576383142907232726.html&ei=1Xu-T9GECcupsALk6Nk0&usg=AFQjCNGUwN9nPQlQoNSdfnIFwXkGnOAZCw

www.google.com... 2012%2F02%2Fwestern-china-riots.html&ei=IHy-T6mWDqTCsALT7bAe&usg=AFQjCNH9cBiQop_zYQkbEmTSOZNGamMdBA

www.google.com... hina%2FRiots-follow-dismissal-of-Chinese-faction-leader%2FArticle1-839052.aspx&ei=IHy-T6mWDqTCsALT7bAe&usg=AFQjCNGdzIyctWAPIw8ZW--r23JXuRk4eQ

www.google.com... ic-16135013&ei=IHy-T6mWDqTCsALT7bAe&usg=AFQjCNHCFSgMhEm4sMh8lKCuHNUEsM2KQg

Google is your friend.....

In order to make an informed opinion, you must have facts and some historical context in which to base your assumptions.