Yeah, it’s starting to be a problem for them. Although their GDP is 6.2, it’s the lowest number in 27yrs. There are multiple reasons for this but the fasted growing sector for them was trade. Unfair trade. Looks like Trumps strategy is paying off.
https://www.nytimes.com/2019/07/14/b...e-war.amp.html
- bambino
- 07-15-2019, 08:56 AM
- dilbert firestorm
- 07-15-2019, 09:19 AM
China’s Economic Growth Hits 27-Year Low as Trade War Stings
By Keith Bradsher
July 14, 2019
阅读简体中文版閱讀繁體中文版
BEIJING — China’s growth fell to its slowest pace in nearly three decades, officials disclosed on Monday, as a resurgence of trade tensions with the United States and lingering financial problems take an increasing toll on one of the world’s most vital economic engines.
Chinese officials said the economy grew 6.2 percent between April and June compared with a year earlier. While such economic growth would be the envy of most of the world, it represented the slowest pace in China since the beginning of modern quarterly record-keeping in 1992. That marks a significant slowdown from earlier this year, when growth came in at 6.4 percent, matching a 27-year low reached during the global financial crisis a decade ago.
Premier Li Keqiang set a target in March for economic growth to be between 6 and 6.5 percent this year. The figures on Monday fell within that range.
But much of the growth in the quarter may have taken place in April and early May, when public confidence was higher because of a tax cut in March and heavy infrastructure spending as spring began.
Trade talks broke down on May 10 and President Trump raised tariffs sharply on Chinese goods, a step that damaged consumer confidence within China. Growth early in the quarter also would have taken place before the contentious government takeover of a bank in late May hurt financial confidence.
Chinese officials on Monday acknowledged that conditions are becoming increasingly difficult.
“Economic conditions are still severe both at home and abroad, the global economic growth is slowing down, the external instabilities and uncertainties are increasing, the unbalanced and inadequate development at home is still acute, and the economy is under new downward pressure,” said Mao Shengyong, a spokesman for China’s National Bureau of Statistics, in a news conference.
Mr. Mao downplayed the effects of trade, saying China’s economy increasingly relies on consumption.
But President Trump, in a Twitter message on Monday about the economic data, said that tariffs on Chinese goods “are having a major effect on companies wanting to leave China for non-tariffed countries.”
“Thousands of companies are leaving,” he said. “This is why China wants to make a deal with the U.S.”
Monthly economic data, particularly for imports, suggests that the second quarter started strong but then slowed. “There was certainly a surge in activity through April,” said George Magnus, a longtime specialist in the Chinese economy who is now at Oxford University. “Something happened in May.”
The number may also understate the extent of the slowdown. Economists widely doubt the veracity of the overall Chinese growth figure, which shows far more stability than comparable numbers from the United States and elsewhere.
A few sectors of the Chinese economy are doing fairly well. The strongest sector appears to be the construction of infrastructure, much of it paid for with money borrowed by local, provincial and national government agencies. Retail sales ticked up as well.
The biggest drag on the Chinese economy lies in trade, which grew powerfully over the past three decades but has stopped rising in recent months. Exports dipped 1.3 percent in June from a year earlier, the government said on Friday, and imports fell 7.3 percent.
While the trade war has hurt American purchases from China, economic weakness in Europe and many Asian countries has caused overseas demand to weaken far more broadly than just in the United States. Last week, Singapore unexpectedly announced that its trade-dependent economy had shrunk at an annualized rate of 3.4 percent in the second quarter.
“The economy is definitely in a broad decelerating trend because the global economy is slowing down, so exports are slowing down,” said Larry Hu, the chief China economist at Macquarie Capital, the investment banking unit of a big Australian multinational.
China’s troubles have their roots not just in trade but also in a debt-laden financial system that has been shaken by a series of large shocks in the last few weeks.
On May 24, Chinese financial regulators took over Baoshang Bank in Inner Mongolia, a small institution that is part of a financial empire previously controlled by Xiao Jianhua, a financier who disappeared into the custody of government investigators two years ago. Regulators tried to force a few of its largest creditors to accept losses rather than bailing them out as a way to teach financiers to be more careful about where they put their institutions’ money.
Problems in some of the shadowy corners of China’s financial system have also frightened investors. China’s shadow banking system plays an important role in funding property projects and other private business ventures. But managers of some riskier investment products have had a hard time making high-interest payments to investors in recent weeks. In some cases they have also had trouble even repaying principal.
These incidents have set off a broader shift in recent weeks away from riskier investments. Institutions and households alike have been putting money into larger, more stable financial institutions run by the central government.
Big state-controlled banks have steered the bulk of their lending to state-owned enterprises. That long-running trend has hurt the real estate market and the broader private sector.
Regulators have repeatedly urged the big banks to lend more to small businesses and the private sector, and Mr. Li, the premier, did so again on July 2. But these exhortations have had limited effect so far. Bank lending officers worry that they might be blamed, or even investigated for corruption, if they extend large loans to struggling private businesses that then default as the economy weakens.
Andrew Collier, the managing director and founder of Orient Capital Research, a Hong Kong investment and economic research firm, said that troubles at Baoshang and in the shadow banking system had rattled financial markets but seemed to have been contained, at least so far.
“The Chinese central bank is watching carefully, and for now will use quiet means to avoid any shaky financial shenanigans,” he said.
Economists are watching for other potential warning signs, like inflation. Price increases have been tame, according to official statistics. But many in China complain that the actual cost of living is rising fast, particularly for food but also for rent and other daily expenses.
Industrial production has weakened this year, as has private sector investment. Housing sales have slowed, as buyers look harder for bargains but sellers have been reluctant to cut prices. Car factories have sharply reduced output in response to weak sales, although there were signs last month that consumer interest in buying luxury automobiles may finally be stabilizing.
The long-running trade war has prompted many multinational companies to look at ways to shift supply chains elsewhere. But many continue to invest in China to supply China’s own market as well as others, especially in Asia.
“The Chinese government will continue to work hard to create a more stable, fair, transparent and predictable investment environment,” Gao Feng, spokesman for the Ministry of Commerce, said at a news briefing on Thursday.
He later added that “China has not experienced large-scale withdrawals of foreign capital.”
For now, though, the economy keeps running to a considerable extent because the Chinese government is pumping huge sums of money into infrastructure. It is building high-speed rail lines, immense highway bridges, ports and other facilities to connect ever smaller and less affluent cities and towns to the rest of the country.
That infrastructure is making it easier to do business and move around even in some of the poorest and most remote areas of China. But bankers and economists worry about whether some of these investments will ever earn enough of a return to cover their cost.
“There’s a very weak commercial basis,” Mr. Magnus said, “for this credit-fueled infrastructure spending.”
Keith Bradsher has been covering the Chinese economy for The New York Times since 2002, as Hong Kong bureau chief and now as Shanghai bureau chief. He previously served as Detroit bureau chief and as a Washington correspondent covering trade and then monetary policy. Follow him on Twitter: @KeithBradsher.
A version of this article appears in print on , Section B, Page 1 of the New York edition with the headline: China’s Economic Growth Slows as Trade War Stings.
By Keith Bradsher
July 14, 2019
阅读简体中文版閱讀繁體中文版
BEIJING — China’s growth fell to its slowest pace in nearly three decades, officials disclosed on Monday, as a resurgence of trade tensions with the United States and lingering financial problems take an increasing toll on one of the world’s most vital economic engines.
Chinese officials said the economy grew 6.2 percent between April and June compared with a year earlier. While such economic growth would be the envy of most of the world, it represented the slowest pace in China since the beginning of modern quarterly record-keeping in 1992. That marks a significant slowdown from earlier this year, when growth came in at 6.4 percent, matching a 27-year low reached during the global financial crisis a decade ago.
Premier Li Keqiang set a target in March for economic growth to be between 6 and 6.5 percent this year. The figures on Monday fell within that range.
But much of the growth in the quarter may have taken place in April and early May, when public confidence was higher because of a tax cut in March and heavy infrastructure spending as spring began.
Trade talks broke down on May 10 and President Trump raised tariffs sharply on Chinese goods, a step that damaged consumer confidence within China. Growth early in the quarter also would have taken place before the contentious government takeover of a bank in late May hurt financial confidence.
Chinese officials on Monday acknowledged that conditions are becoming increasingly difficult.
“Economic conditions are still severe both at home and abroad, the global economic growth is slowing down, the external instabilities and uncertainties are increasing, the unbalanced and inadequate development at home is still acute, and the economy is under new downward pressure,” said Mao Shengyong, a spokesman for China’s National Bureau of Statistics, in a news conference.
Mr. Mao downplayed the effects of trade, saying China’s economy increasingly relies on consumption.
But President Trump, in a Twitter message on Monday about the economic data, said that tariffs on Chinese goods “are having a major effect on companies wanting to leave China for non-tariffed countries.”
“Thousands of companies are leaving,” he said. “This is why China wants to make a deal with the U.S.”
Monthly economic data, particularly for imports, suggests that the second quarter started strong but then slowed. “There was certainly a surge in activity through April,” said George Magnus, a longtime specialist in the Chinese economy who is now at Oxford University. “Something happened in May.”
The number may also understate the extent of the slowdown. Economists widely doubt the veracity of the overall Chinese growth figure, which shows far more stability than comparable numbers from the United States and elsewhere.
A few sectors of the Chinese economy are doing fairly well. The strongest sector appears to be the construction of infrastructure, much of it paid for with money borrowed by local, provincial and national government agencies. Retail sales ticked up as well.
The biggest drag on the Chinese economy lies in trade, which grew powerfully over the past three decades but has stopped rising in recent months. Exports dipped 1.3 percent in June from a year earlier, the government said on Friday, and imports fell 7.3 percent.
While the trade war has hurt American purchases from China, economic weakness in Europe and many Asian countries has caused overseas demand to weaken far more broadly than just in the United States. Last week, Singapore unexpectedly announced that its trade-dependent economy had shrunk at an annualized rate of 3.4 percent in the second quarter.
“The economy is definitely in a broad decelerating trend because the global economy is slowing down, so exports are slowing down,” said Larry Hu, the chief China economist at Macquarie Capital, the investment banking unit of a big Australian multinational.
China’s troubles have their roots not just in trade but also in a debt-laden financial system that has been shaken by a series of large shocks in the last few weeks.
On May 24, Chinese financial regulators took over Baoshang Bank in Inner Mongolia, a small institution that is part of a financial empire previously controlled by Xiao Jianhua, a financier who disappeared into the custody of government investigators two years ago. Regulators tried to force a few of its largest creditors to accept losses rather than bailing them out as a way to teach financiers to be more careful about where they put their institutions’ money.
Problems in some of the shadowy corners of China’s financial system have also frightened investors. China’s shadow banking system plays an important role in funding property projects and other private business ventures. But managers of some riskier investment products have had a hard time making high-interest payments to investors in recent weeks. In some cases they have also had trouble even repaying principal.
These incidents have set off a broader shift in recent weeks away from riskier investments. Institutions and households alike have been putting money into larger, more stable financial institutions run by the central government.
Big state-controlled banks have steered the bulk of their lending to state-owned enterprises. That long-running trend has hurt the real estate market and the broader private sector.
Regulators have repeatedly urged the big banks to lend more to small businesses and the private sector, and Mr. Li, the premier, did so again on July 2. But these exhortations have had limited effect so far. Bank lending officers worry that they might be blamed, or even investigated for corruption, if they extend large loans to struggling private businesses that then default as the economy weakens.
Andrew Collier, the managing director and founder of Orient Capital Research, a Hong Kong investment and economic research firm, said that troubles at Baoshang and in the shadow banking system had rattled financial markets but seemed to have been contained, at least so far.
“The Chinese central bank is watching carefully, and for now will use quiet means to avoid any shaky financial shenanigans,” he said.
Economists are watching for other potential warning signs, like inflation. Price increases have been tame, according to official statistics. But many in China complain that the actual cost of living is rising fast, particularly for food but also for rent and other daily expenses.
Industrial production has weakened this year, as has private sector investment. Housing sales have slowed, as buyers look harder for bargains but sellers have been reluctant to cut prices. Car factories have sharply reduced output in response to weak sales, although there were signs last month that consumer interest in buying luxury automobiles may finally be stabilizing.
The long-running trade war has prompted many multinational companies to look at ways to shift supply chains elsewhere. But many continue to invest in China to supply China’s own market as well as others, especially in Asia.
“The Chinese government will continue to work hard to create a more stable, fair, transparent and predictable investment environment,” Gao Feng, spokesman for the Ministry of Commerce, said at a news briefing on Thursday.
He later added that “China has not experienced large-scale withdrawals of foreign capital.”
For now, though, the economy keeps running to a considerable extent because the Chinese government is pumping huge sums of money into infrastructure. It is building high-speed rail lines, immense highway bridges, ports and other facilities to connect ever smaller and less affluent cities and towns to the rest of the country.
That infrastructure is making it easier to do business and move around even in some of the poorest and most remote areas of China. But bankers and economists worry about whether some of these investments will ever earn enough of a return to cover their cost.
“There’s a very weak commercial basis,” Mr. Magnus said, “for this credit-fueled infrastructure spending.”
Keith Bradsher has been covering the Chinese economy for The New York Times since 2002, as Hong Kong bureau chief and now as Shanghai bureau chief. He previously served as Detroit bureau chief and as a Washington correspondent covering trade and then monetary policy. Follow him on Twitter: @KeithBradsher.
A version of this article appears in print on , Section B, Page 1 of the New York edition with the headline: China’s Economic Growth Slows as Trade War Stings.
- Chung Tran
- 07-15-2019, 09:27 AM
a bit of an overreaction.. growth falling from 6.4% to 6.2 in one quarter? when the stated goal was the 6.0 to 6.5% range?
it might be welcomed news for China.. they don't want to heat up too much, with all the Government spending in place. funny how the article warns of that Government spending increase, when our Government has financed much of our growth for years.
it might be welcomed news for China.. they don't want to heat up too much, with all the Government spending in place. funny how the article warns of that Government spending increase, when our Government has financed much of our growth for years.
- The_Waco_Kid
- 07-15-2019, 09:36 AM
a bit of an overreaction.. growth falling from 6.4% to 6.2 in one quarter? when the stated goal was the 6.0 to 6.5% range?
it might be welcomed news for China.. they don't want to heat up too much, with all the Government spending in place. funny how the article warns of that Government spending increase, when our Government has financed much of our growth for years. Originally Posted by Chung Tran
ah No. Business in the US is not controlled and propped up by Government like China is.
and for all that propping up, what have they gotten? has the standard of living increased to match this so-called growth? China may have the second largest economy but they are still a 3rd world nation steeped in abject poverty.
https://www.forbes.com/sites/ralphje.../#7046db3b7e9e
Despite China's Fast-Growing Wealth, Millions Still Remain Poor
- bambino
- 07-15-2019, 09:42 AM
a bit of an overreaction.. growth falling from 6.4% to 6.2 in one quarter? when the stated goal was the 6.0 to 6.5% range?That fact of the matter it’s the lowest in decades and trending the wrong way. Companies are pulling out. Trade war, Government interference and a shady banking system. Then there’s that little dust up in Hong Kong. XI has to keep the people in line. They’re starting to get a little restless.
it might be welcomed news for China.. they don't want to heat up too much, with all the Government spending in place. funny how the article warns of that Government spending increase, when our Government has financed much of our growth for years. Originally Posted by Chung Tran
- Chung Tran
- 07-15-2019, 10:19 AM
That fact of the matter it’s the lowest in decades and trending the wrong way. Companies are pulling out. Trade war, Government interference and a shady banking system. Then there’s that little dust up in Hong Kong. XI has to keep the people in line. They’re starting to get a little restless. Originally Posted by bambinoyes.. this is a much more reasonable conclusion.
ah No. Business in the US is not controlled and propped up by Government like China is. Originally Posted by The_Waco_KidI didn't say BUSINESS.. I said GROWTH.
Government spending accounts for a big chunk of the growth in the US economy. like it or love it. or not. Republicans claim to not like it, but they finance more growth through Government spending than Democrats.
- The_Waco_Kid
- 07-15-2019, 10:23 AM
yes.. this is a much more reasonable conclusion.
I didn't say BUSINESS.. I said GROWTH.
Government spending accounts for a big chunk of the growth in the US economy. like it or love it. or not. Republicans claim to not like it, but they finance more growth through Government spending than Democrats. Originally Posted by Chung Tran
well you can prove that, right??
China controls everything. growth doesn't happen without the State banks lending to Business.
so are they going to lend themselves into more growth with more loans to business to build bullshit??
- Chung Tran
- 07-15-2019, 10:29 AM
of course.. that is a proven economic strategy since Keynes forwarded the idea during the Great Depression. Obama did it to great results, after the Bush Administration brought in a near collapse of the US Banking system.
so are they going to lend themselves into more growth with more loans to business to build bullshit?? Originally Posted by The_Waco_Kid
for some reason, Republicans deny the positive impacts of Government spending, while racking up larger Deficits than the Democratic President that preceded them.
- The_Waco_Kid
- 07-15-2019, 10:34 AM
of course.. that is a proven economic strategy since Keynes forwarded the idea during the Great Depression. Obama did it to great results, after the Bush Administration brought in a near collapse of the US Banking system.
for some reason, Republicans deny the positive impacts of Government spending, while racking up larger Deficits than the Democratic President that preceded them. Originally Posted by Chung Tran
Bush caused the banking collapse. interesting. the banking collapse was a fuse lit by Democrat Willie Blythe when he repealed Glass–Steagall.
now about those deficits .... who's the king of running up deficits??
this guy
so what was your point, exactly??
- Chung Tran
- 07-15-2019, 10:50 AM
my point is that Republicans always try to shift blame to others.. Obama's deficits were much smaller than Trump's, even as Obama had to create mass deficit spending to jump start the economy that imploded during Bush's final months.
it's funny how y'all give Bush a pass, and point to some marginal player fucking up Glass-Steagall as the root cause of all that occurred after. the Bush administration was clueless on the economy, your Boy McCain said the economy was "sound" 72 hours before Bear Stearns collapsed.
why do I never get an answer, why Republicans spend MORE than Democrats, even as their rhetoric claims to abhor deficits?
oh, that was funny as Hell the other day, when Kudlow, who USED to be the staunchest anti-deficit talker around, said we would grow our way out of the current deficit... Hahahahahahaha!
it's funny how y'all give Bush a pass, and point to some marginal player fucking up Glass-Steagall as the root cause of all that occurred after. the Bush administration was clueless on the economy, your Boy McCain said the economy was "sound" 72 hours before Bear Stearns collapsed.
why do I never get an answer, why Republicans spend MORE than Democrats, even as their rhetoric claims to abhor deficits?
oh, that was funny as Hell the other day, when Kudlow, who USED to be the staunchest anti-deficit talker around, said we would grow our way out of the current deficit... Hahahahahahaha!
- Chung Tran
- 07-15-2019, 10:58 AM
- bambino
- 07-15-2019, 11:03 AM
my point is that Republicans always try to shift blame to others.. Obama's deficits were much smaller than Trump's, even as Obama had to create mass deficit spending to jump start the economy that imploded during Bush's final months.They’re all guilty:
it's funny how y'all give Bush a pass, and point to some marginal player fucking up Glass-Steagall as the root cause of all that occurred after. the Bush administration was clueless on the economy, your Boy McCain said the economy was "sound" 72 hours before Bear Stearns collapsed.
why do I never get an answer, why Republicans spend MORE than Democrats, even as their rhetoric claims to abhor deficits?
oh, that was funny as Hell the other day, when Kudlow, who USED to be the staunchest anti-deficit talker around, said we would grow our way out of the current deficit... Hahahahahahaha! Originally Posted by Chung Tran
https://www.thebalance.com/us-debt-b...ercent-3306296
- Chung Tran
- 07-15-2019, 11:09 AM
They’re all guilty:they are.. good article.
https://www.thebalance.com/us-debt-b...ercent-3306296 Originally Posted by bambino
what it really shows, is throwing around deficit numbers is like Mule-fucking.. you aren't going to create anything, it's a useless exercise.
if the 20+ trillion dollar deficit had much meaning, the US economy would have been destroyed long ago.
- lustylad
- 07-15-2019, 11:24 AM
Obama's deficits were much smaller than Trump's....You're wrong about Obama's deficits, Chung. In his first 4 years in office, obama topped $1 trillion in federal budgetary red ink every fucking year! So far Trump's deficits have remained under $1 trillion.
oh, that was funny as Hell the other day, when Kudlow, who USED to be the staunchest anti-deficit talker around, said we would grow our way out of the current deficit... Hahahahahahaha! Originally Posted by Chung Tran
And Kudlow is right about "growing our way out" of the problem. Try looking at the deficit as a % of GDP instead of just nominal dollars. A bigger pie makes it easier to handle the debt.
Btw we never paid off our WW2 debt. We just grew our way out of it. You should know that.
I already had this convo two months ago when I had to bitch-slap adav8s28. I thought you were smarter than him:
https://eccie.net/showpost.php?p=106...&postcount=136
- friendly fred
- 07-15-2019, 12:24 PM
That fact of the matter it’s the lowest in decades and trending the wrong way. Companies are pulling out. Trade war, Government interference and a shady banking system. Then there’s that little dust up in Hong Kong. XI has to keep the people in line. They’re starting to get a little restless. Originally Posted by bambinoWhen I went to China the people were very nice to me but the air quality absolutely sucked.
Massage parlors were about half the cost of what we have here and the girls were actually in their twenties there!
They also discriminate against black people there. I only saw one black guy the whole time I was there.
My hosts implied ugly things about African people so naturally I corrected their hateful racial stereotypes.