China Daily: Coming weeks are 'crucial'

China Daily ^ | April 5, 2012 | By Chen Jia

[Oldeconomybuyer]

The coming few weeks will be the most crucial time for the country's economy in all of 2012, say Chinese economists.

Many observers say the country's economy is decelerating too quickly. The biggest question facing government officials now is whether they will be able to bring that slowdown to a gradual halt, said Wang Jun, senior economist with the China Center for International Economic Exchanges, a government think tank.

State-owned companies faced the stronger headwinds. Their 179.1-billion-yuan profit for the two months was down by as much as 19.7 percent year-on-year.

Companies owned by overseas investors, meanwhile, earned 141.9 billion yuan in profit in those months, down by 18.9 percent year-on-year. Only companies under collective or domestic private ownership continued to report increases in profit.

Even though some slowing down is expected, the economy is losing speed faster than some observers expected - a tendency that has been reinforced by sluggish demand from both home and abroad.

In coastal cities, export-oriented industries are slowing down across the board as a result of dwindling orders from the heavily indebted eurozone and surging production costs.

Throughout the country, retail outlets have seen their business slow down as the government allowed stimulus policies to expire without replacing them with new ones. High-level sources said the government, especially the Ministry of Commerce, is working to stoke consumption but that the policies needed for that purpose will still take some time to formulate.

The Ministry of Commerce recently designated April as the first "month to promote consumption". But policies meant to support buyers have yet to be introduced nationally.

[TEXOKIE]

bfl

[Buckeye McFrog]

WABC’s John Bachelor had a fascinating guest on last evening, a Chinese economist living in Australia. He claimed that the Chinese economy is starting to tank for reasons similar to why Obama is tanking ours over here (the diversion of resources to non-productive state enterprises for political reasons).

[old3030]

Centrally planned economies are mismanaged. It has always happened, and it always will.

Additionally, the Chinese government is getting resistance from the old-line commie workers. There are worker groups in China who do not like and rebel against private managers. They want a return to the “good old days” of full government control of factories where they did not have to produce but got paid the same as everyone else — kind of like the UAW with pensions and insurance.

It is not wise to believe any numbers coming out of China. Shoot, it isn’t wise to believe any numbers coming out of the U.S. government. Obama appears to be pulling the stats out of his BL-@ss. :)