Posted on 10/23/2009 7:31:44 AM PDT by SeekAndFind
On Oct. 22, Beijing announced that gross domestic product grew by 8.9% in the third quarter of 2009 compared with the corresponding period last year. The National Bureau of Statistics also reported that growth for the first three quarters was up 7.7%.
The 8.9% figure confirmed the economy's upward trend. Growth, according to official statistics, tumbled to 6.1% in the first quarter, well off the double-digit figures seen in 2007 and the first half of last year. The economy picked up during this year's second quarter, when it expanded 7.9%. Now it is clear that China will attain for 2009 at least the 8% target that Premier Wen Jiabao set in January. China's leadership is evidently satisfied. As the State Council noted on Wednesday, "The positive trend of recovery has been consolidated."
How could it not have been? Since last November, Beijing has spent perhaps as much as $900 billion--from its own funds as well as those of the larger state banks--to jump start its $4.3 trillion economy. No government can disburse that amount of cash without creating some economic activity.
Yet China's economy, for all the stimulus it has received in 11 months, is underperforming. As an initial matter, reported third-quarter growth was slightly below the 9.1% consensus estimate of economists. More important, it is unlikely that 3Q expansion was anywhere near the claimed 8.9%. This claim is not consistent with other statistics. The economy, for example, is still dependent on exports: Before the massive government spending, about 38% of GDP was attributable to sales abroad. Yet exports tumbled 23.0% in July, 23.4% in August and 15.2% in September. Another important indication of slowing activity was the third-quarter drop in imports. They fell 14.9% in the first month of the quarter,17.0% in the second and 3.5% in the last.
(Excerpt) Read more at forbes.com ...
The author asks the all important question and answers it :
How can a country have robust consumer sales, nagging deflation and rapid monetary expansion all at the same time? One reason is that vast quantities of consumer goods are now sitting in warehouses. There are reports that central government officials have ordered state enterprises to buy fleets of vehicles and that these businesses are storing them in parking lots across the country. These stories are as yet unconfirmed, but they are consistent with statistics showing that gasoline sales have been flat this year—up only 6.4% in August, for instance, and sliding since then from all indications.
Beijing’s statisticians have gone back to their old tactic of making up figures to support the Politburo’s predictions. The Chinese economy is probably growing due to state-led investment, but it cannot be doing so at the rates claimed.
When Walmart is cutting back on Chinese junk because of a dismal Christmas-sales forecast, it seems unrealistic that their economy is this robust.
(By the way, there is something fundamentally wrong about Christian bookstores selling nativity scenes made by Communist slave labor. Last year, I couldn’t find any that were not “Made in China.”)
The Chinese economy has been getting freer while ours keeps getting more controlled. Chinese people have become more independent while Americans have become more dependent.
by: The Pragmatic Capitalist
October 22, 2009
Goldman Sachs has been bullish about all things BRIC for years now. In a recent trip to China a number of Goldman analysts visited local and foreign oil and gas related companies as well as various equity investors in major Chinese cities. Their main takeaway from the trip was that their bullish thesis on the country was justified, China commodity demand would drive prices higher and they feel increasingly confident about their current $94 crude oil price target. Their micro takeaways from the trip included some focused ideas on the energy markets:
* Sustained oil demand growth on-track, with the rebound this year having been driven mostly by domestic drivers as export-oriented markets have been weak.
* Domestic crude oil supply growth expected to remain anemic, leading to growing crude oil imports and a hunt for international oil acquisitions by Chinese major oil companies.
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My wife has tagged this website:
This funnels searches to companies selling products made in USA....
hh
by: Paul Harper
October 23, 2009
While the Chinese economy expanded 8.9% in Q3, propped up by easy credit & continued government spending programmes, Europe, US & Japan continue to flounder.
The world’s 3rd largest economy has recorded 7.7% overall growth in the first 9 months of 2009, with officials saying they are confident that the much talked about annual growth target of 8% will be achieved.
Last November, as it became clear that the global economy was heading into a recessionary period, central government implemented a 4 Trillion yuan/$586 Bn stimulus package, aimed at cushioning the blow of decreasing exports on the economy whilst also improving industrial efficiency at all levels.
Via this stimulus package, China has implemented a number of schemes that impact practically all sectors in the economy; real estate/construction, transportation infrastructure, agriculture, social services, industry, earthquake reconstruction, technology advancement and rural development being amongst those receiving special focus.
The strategy has paid off, with growth rising to 7.9% in Q2 from 6.1% in Q1 2009. Figures show that industrial output has risen 8.7% in the first three quarters of the year, and 12.4% in July-September, which would seem to signal accelerated demand from domestic purchasers, keen to take advantage of low cost loans to invest in the expected turnaround for China in 2010.
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It is a fraud but I dropoped Forbes because they helped make one of Obama’s closest advisors rich but running his column for years. His funds lost 50+% last year but I guess Forbes thinks those returns are good. This POS who became wealthy thanks to Fobes, was one of O’s earliest big $$$ contributors along with his wife. Thanks Forbes.
Their government has been mandating the government controlled banks to make loans. There has also been an increase in domestic government spending. Like here in the US, the government expenditures are counted in GDP figures. The banking issues they’ve set up are going to come back to bite them IMO.
The real depression begins when China’s “House of Cards” economy collapses.
big fairy tail there exports are down hugeeeeeeeeeeeeee. does anyone tell the truth anymore?
Numbers from China is nothing but a lie, sugarcoating the facts. Why believe in numbers from a Communist?
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