Posted on 11/17/2015 2:21:20 PM PST by blam
Linette Lopez
November 17, 2015
A new report by The Demand Institute — a collaboration between Nielsen and The Conference Board — has a dark prognostication for China.
And it has got all the China watchers on Wall Street talking.
"Many analysts once forecast a soft landing for the economy after more than 35 years of breakneck growth, but that landing point is still not in sight," the report said.
It continued: "While we believe the government will pull enough policy levers to prevent full-blown economic crisis, the danger remains that China is facing a protracted period of declining growth."
The report predicts 4.5% gross domestic product growth on average between 2015 and 2020, and 3.6% on average from 2015 to 2020 if the government is able to stave off disaster through policy mechanisms.
Here is the killer line:
China's productivity crisis — the result of both institutional deficiencies and a maturing economy — remains unaddressed. For these reasons, we believe China is facing a protracted period of declining growth that will be much longer and deeper than analysts may have predicted.
(snip)
(Excerpt) Read more at businessinsider.com ...
This is cyclical isn't it. This is how the markets generally operate. There's a big run-up about once in twenty-thirty years, and then there's a big slide. Eventually it repeats.
We're just seeing the typical market at work > IMO.
After the events in Paris on 11/13, I will be adding
this to my posts for the next week. I'm certain our
turn is coming again soon. We stand united against
Islamic extremists.
Some music for reflection if the mood strikes you.
Courtesy of: Kartographer
beautiful [02:23]
An honorable mention also goes out to Lassana Bathily , a Muslim immigrant from Mali.
Mr. Bathily sheltered customers at the Jewish Deli and helped police by providing info
on the terrorists, and providing the location of survivors in the deli.
Courtesy of: Tijera_Slim
Their economy should have tanked long ago. I’m surprised at how tedious it really is.
5 Signs China’s Economy is Weaker Than You Think
https://www.youtube.com/watch?v=GrpAZ5qHSlU
My take is that China is far more resilient than these guys seem to think. There is still a huge pent up demand in China and while they are not immune for the business cycle, they’ll come out of this downturn just fine.
My question is when will the US manage to wake from its decades-long government induced slumber and start acting like the global engine of growth that it once was, before China took the mantle of the world’s largest manufacturing powerhouse.
A few things about China:
- They are funding a lot of their own markets...i.e. buying our debt. They can’t do that forever.
- India and Africa could ‘outChina’ China, with even cheaper labor and complete absence of regulation.
Almost 10 years ago, I read a book about China’s economy. At that time, they had over 100 cities with over a million people in it! And I think their economy had to add 200,000 jobs a month, just to keep up with birthrate.
There were also some interesting facts about demographics. Their preference for boys, coupled with their one child policy and forced abortions have led to a disparity between male and female. Its around 30 million (man that’s a lot of abortions), meaning there are 30 million Chinese men (roughly 10% of our population) with no prospect of finding a wife. Added to this is a preference in factories to hire women, who a viewed as more reliable and less trouble to employ. The result is that Chinese cities have tens of thousands of young men who have a hard time finding both a wife and a job. So there are a lot of pent up social pressures there. I’d hate to see what happens if their growth really slows.
Interesting; I’ve read that copper can be a very good predictor of near/medium term infrastructure-building activity.
Thanks for your thoughts. Question: how does China buying our debt fund their own markets? I don’t follow that line of thought. I’m not saying you are wrong in any way, only that I don’t understand the mechanism. It seems to be that buying our debt would reduce their ability to fund growth at home. I agree that the Chinese cannot continue funding our profligacy forever.
On the male-female discrepancy - that’s a real long term problem, not just in China but in Korea and India as well. Some countries have gone so far as to outlaw ultrasound for gender determination, but those laws are impossible to enforce. the resultant demographic skewing is very troublesome. In Korea it is responsible for a huge increase in prostitution, as you might imagine.
What is shocking is that anyone would be shocked that the chi-coms are excellent propagandists. Americans are trying to catch up.
Our economy right now is based on government spending. If that were taken away, our growth would be nihl, and consumer spending would plummet.
So how does the government keep spending?
Elaborate shell games with the fed and bond sales.
And it is China that keeps stepping up to the plate to buy these bonds. Every time we ‘raise the debt ceiling’, we have to find a sucker to actually loan us the money....and China keeps doing it to keep our consumer economy going...so we can buy tv sets, cell phones, and plastic toys from them.
They are getting squeamish though...not always buying the debt and forcing the fed to do more shell games - ever wonder why the national debt catapults right after the debt limit is raised? Paying back pension funds that were ‘borrowed’ from and other monetary tricks.
Will we ever pay China back? Sort of...we control our money supply and can devalue our debt (and our individual savings) with inflation. China knows that. So they really are between a rock and a hard place.
That's why It's called Doctor Copper:
Market lingo for the base metal that is reputed to have a Ph.D. in economics because of its ability to predict turning points in the global economy. Because of copper's widespread applications in most sectors of the economy - from homes and factories, to electronics and power generation and transmission - demand for copper is often viewed as a reliable leading indicator of economic health. This demand is reflected in the market price of copper. Generally, rising copper prices suggest strong copper demand and hence a growing global economy, while declining copper prices may indicate sluggish demand and an imminent economic slowdown.
OK. I misunderstood. When you referred to “their markets” i thought you were talking about their domestic markets, but you were referring to US!
Makes a lot more sense now that I understand what you were getting at.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.