Posted on 01/02/2009 6:30:24 PM PST by bruinbirdman
China’s vast manufacturing sector, the driving force behind the country’s celebrated economic growth story, is on the brink of technical recession as order books run dry and once humming factories fall silent.
The bleak snapshot of business conditions, which may herald yet more shrinkage in China’s growth prospects this year, arrived yesterday via the manufacturing purchasing managers’ index (PMI), a survey produced by CLSA, the Hong Kong brokerage.
Widely scrutinised by markets, the monthly report is considered by many investors to be one of the most useful leading indicators for the Chinese economy. Over the past 12 weeks it has painted a far more rapidly worsening picture than anyone predicted and now highlights China’s unexpectedly high vulnerability to the global financial crisis.
Eric Fishwick, CLSA’s chief economist, who compiled the PMI report, said that China’s manufacturing activity was very weak last month. “Output contracted at a record pace, employment fell for the fifth month and work in hand declined.” he said. “With five back-to-back PMIs signalling contraction, the manufacturing sector, which accounts for 43 per cent of the Chinese economy, is close to technical recession.”
Although the main PMI index rose slightly in December from its record low in November, the reading of 41.2 means that the CLSA index remains far below the levels once considered normal. A reading below 50 means conditions are worsening: the accompanying manufacturing output index plunged to 38.6, marking the sharpest drop since the survey began. The Chinese Government’s own PMI for December is due to be published tomorrow, and analysts believe that it is likely to show similar pessimism throughout the manufacturing sector.
The worsening meltdown spells yet more misery for Beijing as the Government battles to restore stable growth. Many believe that the Communist Party’s political legitimacy depends heavily on its ability to
(Excerpt) Read more at business.timesonline.co.uk ...
Pei Ping.
I iz heartbroken.
I noticed my food lately tasted less Melaminey,..dang I uz gettin used to tha convulsions and open sores.
After seeing thousands and thousands of those manufacturing jobs lost here to China, you won’t see me shed a tear for them.
I am already going to miss the cadmium and lead in the (un)Happy Meal toys.
“I guess the lead paint, poisoned ingredients and crappy and dangerous workmanship caught up with the Chinese. That didn’t take long.”
The “Asian Century” was four years shorter than the Thousand Year Reich”/s
at the risk of sounding repetitive, just let me state: I just LOVE a happy ending
Great. Now I’m gonna have to eat my countertops to get my daily allowance of melamine.
There goes Wal Mart ... and without Hillary!s help.
Where is ElbeeJay when you need him, mah fellow Ahmurican? Maybe TRickee Dikie know?
YOU DON'T DO BUSINESS WITH PEOPLE WHO GOT NO MONEY!!!
Thanks, Richard Milhouse Nixon....you stupid sh*t....thanks for nothing.
Well, maybe not for nothing....there's lead and melamine in our diet and God-knows-what else in the form of viruses and disease from China.
Thanks a lump, Nixon.
The Olympics are over and the water is cold.
[blockquote]I guess the Olympics are over.[/blockquote]
They really are. A couple of years ago a salesman from one of our data services came to give his annual forecast talk to the office and he said his personal belief was that the Beijing Olympics were almost completely responsible for the commodity bubble that had been growing since early 2003 and that China was inflating the world economy solely because of Olympic building and development. Oil was only around $50 then and he said it was going to go up rapidly and then drop like a rock right after the Olympics. Metals, too. We all thought he was a quack then. Now I wish I could remember his name.
Turn out the lights, the party’s over.
I bought some onions at Meijers the other day and when I got them home I looked at the tag and saw that they were grown less than 20 miles from here.
Can’t really blame Nixon for China. He opened up diplomatic relations with them but those who encouraged them to continue to be commies and get rich doing so are still living.
If their economy hits a hard crash, what’s to keep them from collecting their U.S. loans? They’re the largest holder of our deficit, which was good for them to finance as we bought their products and kept their people working.
If we stop spending, and they stop working, who’s going to feed them?
Besides China, the air should clean up some over Korea and Japan.
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