Posted on 08/10/2012 1:50:00 PM PDT by SatinDoll
Those who think that we're going to "muddle through" have another think coming...
China’s export growth collapsed and imports and new yuan loans trailed estimates in July, reports today showed.
Outbound shipments increased 1 percent from a year earlier and imports rose 4.7 percent, the customs bureau said. The growth in July exports compared with the 8 percent median estimate in a Bloomberg News survey and 11.3 percent in June. Analysts estimated a 7 percent gain in imports after a 6.3 percent increase in June.
[snip]
(Excerpt) Read more at market-ticker.org ...
This past July was the beginning of the Christmas season-cycle. "Goods in transit have to cross an ocean in a container ship, after which they go to warehouses and are stocked back for the holidays."
What this simply means is that we are approaching what can only be termed, "the economy is going to flush..." Hang onto your Argyles!
Every day all day long it’s doom and gloom and it hasn’t happened yet. I guess one of these days it will happen but by reading the posts articles posted on here the past 3 years you’d think we need to hide in our bunkers!
Outbound shipments increased 1 percent from a year earlier and imports rose 4.7 percent, the customs bureau said. The growth in July exports compared with the 8 percent median estimate in a Bloomberg News survey and 11.3 percent in June. Analysts estimated a 7 percent gain in imports after a 6.3 percent increase in June.
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Let me see if I understand this, shipments have increased from last year although not near expectaitons so things are bad?
Yep, this may reduce their growth from to 7% per year, rather than 10%. So we have a larger GNP for another year, yippee.
Unemployed Chinese slaves hurts us how?
The article was a bit too short for me. But with that being said, I’m not surprised.
China’s business model is based on low cost and high volume to EXTERNAL customers. Internally they are a real mess, the POTENTIAL domestic market is huge beyond belief. The reality is that although it is indeed growing in size the members of that newly opened domestic market are the sames ones who rely upon the export of goods for their livelihood.
The U.S. has been their biggest customer for years with Europe as a whole being second. We’re both in financial and employment difficulties. That translates into fewer sales for the Chinese. And their factories are producing goods designed to appeal to us not necessarily to potential customers in other nations. And I’m not really sure that they can retool to cater to other customers in time to save themselves.
That all comes to one point now, China is now on the edge of a slippery downhill slope too. And I believe that when everyone hits bottom together it’s going to get very messy.
The following is an excerpt from an article at Zerohedge detailing the economic problems in Europe and China.
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China’s July activity data came in weaker than expected across the board
Industrial production decelerated further to 9.2% yoy and nominal retail sales growth stepped down to 13.1% yoy, both much below expectations. Total fixed asset investment growth remained at 20.4% yoy year-to-date, but the yoy rate for the single month of July slowed by 0.7ppt from the 21.1% in June.
The property sector continued to exert downward pressure on overall growth momentum. Despite the impressive rebound in housing sales (in volume terms, +13% yoy in July vs -3.3% yoy in June), property investment growth dropped below +10% yoy, within which investment in residential projects was up only 4.8% yoy in July. Moreover, total new starts declined 26.7% yoy in July and residential new starts contracted 30.4% yoy. The base effect was one of the factors contributing to such a sharp decline, but the trend since Q1 has been unambiguously sluggish.
Infrastructure investment did pick up, but was still too modest to offset the drag from the housing sector. Railway FAI growth recovered to -6.6% yoy in July from -21.5% yoy in June and highway FAI growth rebounded to +8.5% yoy from -6.9% yoy. This trend is set to persist in the coming months, with the help of credit expansion and acceleration in bond issuance.
We have been arguing that Beijing is unwilling to repeat the investment stimulus of 2009/10 and that a moderate boost to infrastructural investment without a relaxation in property policies will not be enough to lift overall growth substantially. Today’s data reconfirms our view. And, unfortunately, the bottoming-out seems to be taking even longer than we initially anticipated.
Clearly, the easing policies announced so far have not fully passed through to the real economy. The central government’s determination to cap property prices will continue to obstruct its push for public investment. We think the PBoC’s options could be even more limited if food inflation continues from here onwards. We see the most likely action from the PBoC as further liquidity easing via reverse repo and required reserve ratio cuts, alongside increased bank lending. We continue to look for a 50bp RRR cut in August.
Given today’s data and expectations for further incremental easing, we revise down our forecast for Q3 GDP growth from 8% yoy to 7.7% yoy, but our Q4 call for 8% yoy remains unchanged. This revision reduces our full-year growth forecast to 7.8% from 7.9%.
To see charts, go to: http://www.zerohedge.com/news/ecb-re-regurgitates-draghi-greek-unemployment-rises-new-record-china-deteriorates-no-easing-sig
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I am no expert on China. My community does a lot of business with Japan and Asia, as southwest Washington State exports grain and lumber, imports Japanese cars and Asian goods generally.
When I moved here 13 years ago, the local newspaper had 6 to 7 pages filled with help wanted ads. Today, they can barely must 4 or 5 help wanted ads, period. That doesn’t even fill a column! Our unemployment rate is actually around 25% and huge numbers of people are on food stamps.
I see the problem of Chinese exports due to lack of customer demand from our end. For China itself, exports are essential to maintaining peace and security within its borders. We are not buying, and that will cause problems for them. Their economy AND social/national stability requires that China stays employed. It would help them enormously if the yuan replaced the dollar as the global reserve currency. An internally unstable China is a very dangerous entity.
The article referenced ended with this statement: “In other words, the economy of the entire world is rapidly deteriorating. But at least futures are up at last check.”
It’s hard to know whether I should laugh or cry.
i’m not sure China is “headed for the ditch”, but the one thing that is certain is that hyperbole (exaggeration) is soaring at Market-ticker.
On the whole the entire Chinese economy could go belly up and it would be a net plus for the USA.
China: going into the ditch since 2007, according to the propagandists pushing for an unnaturally high dollar in a globalist market and with US manufacturing still going down.
It hasn’t happened, yet. Production is still up in China and in other “developing” parts of the world. That’s why your fuel prices keep going up (new third-world drivers with 100s of millions more on the way and fuel needed for manufacturing, transportation, etc.).
Have fun. Enjoy the slide. Our western default process continues, even though the distraction propaganda continues with it.
These Ponzi schemes can unravel in a hurry. When the rabble figure out that some Chinese are really living high while their lives get harder.....
Oh boy!
You mean you're not in your bunker?
Quit clicking on the D & G articles if you don't like them.(I don't click on UFO articles, it works)
Simple, eh?
Those are the results of inflating the currency.
China copied the example of the U.S. -- and the results will be the same. Lower exports, higher imports. All thanks to government-caused inflationary monetary policy.
Wonder where the anti-free-traders are when the situation doesn't fit their template.
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