Skip to comments.[Communist] Chinese manufacturing shows shock slump
Posted on 09/01/2012 11:17:43 PM PDT by bruinbirdman
Surprise figures from Beijing show that activity at Chinese factories contracted for the first time in nine months.
China offered fresh evidence of its slowing growth as official figures showed manufacturing activity unexpectedly shrunk for the first time in nine months.
The state-backed China Federation of Logistics and Purchasing said its purchasing managers index (PMI) survey fell to 49.2 in August from July's 50.1, where any reading under 50 marks a drop in the sector's activity. Economists polled by Bloomberg had expected the survey to show a reading of 50, meaning that activity was flat.
New orders fell as exports kept weakening, while output from the sector increased at a slower pace, the survey showed. The figures confirm the economic slowdown in China, where growth fell to a three-year low of 7.6pc in the quarter ending in June.
In response to the slowing growth, Beijing cut interest rates in June and July and is trying to pump up the economy by approving a wave of new industrial investments.
However authorities have resisted calls for more aggressive stimulus measures, after huge spending in response to the 2008 crisis stoked spiralling inflation and a risky building boom.
Wen Jiabao, the Chinese premier, said on Saturday it was too early to loosen curbs on speculative property investment. "The controls over the real estate market are still in a critical period," he said.
Forecasters expect growth to rebound late this year or in early 2013, but say a recovery will be too weak to drive global growth
(Excerpt) Read more at telegraph.co.uk ...
Not really a surprise since exports are probably WAY down in this economy and the government has “stimulated” their economy by building ghost cities to nowhere.... it’s all going to come crashing down sooner or later.
According to popular, sponsored opinions, our global oligarchy’s approved manufacturing zone (East Asia) is still collapsing since 2007. On December 1st of 2007, the first western slowdown and multi-company lock against hiring was orchestrated to lower oil prices, slow the steep manufacturing increases in the East and keep the dollar high. In a free market, global economy, currencies will balance if allowed to do so. Currencies are not being allowed to balance.
Brilliant analysis! When China’s economy crashes, there will be the problem of U.S. debt with China. Mainland China holds $1169.6 billion dollars in U.S. debt. China has a national debt crisis of its own, which makes its economy even more fragile. If China falls, there will be a domino effect in the world markets. It does not look good and one thing for sure, Zer0 is not up to the task for the economic challenges on the horizon.
I’ve read that China’s biggest trading partners are Europe, so it makes sense if Europe is in a severe recession, that China’s economy would take a hit.
I tend to believe that as long as we stick to our fundamentals (wealth creation) we will preserve even as the rest of the world’s economies collapse around us. Of course, considering that 40% of America still approves of Obama, that “if” is a fairly large caveat.
It’ll be a rough go, but as long as the government can resist the temptation to double down on Krugmanesque anticyclical spending, there should be a sharp V uptake.
Of course, as you pointed out, Obama in the scenario you suggest would be like pouring gasoline on top of flames.
Trade is a necessity. Suicide is not.
Communism is a failed experiment, and China will have to realize this.
Chinese manufacturing shows shock slump
I’m surprised it’s taken so long before the people got tired of shoddy merchandize. 90% of all the junk they manufacture in China is eventually recalled.
Zer0 is not up to the task for the economic challenges on the horizon.
I think he is, because if he does nothing he gets exactly what he wants.
Obama doesn't believe so.
If I was an investor in China I would be mighty worried about my investment suddenly being nationalized.
I don’t think that is too likely right now. What is more likely to be seen is that foreign investors will be asked to sell their interest in factories or other interprizes for pennies on the dollar so they can re-coup at least some of their investment.
The goods are not shoddy. To say that is to announce you unfamiliarity with Chinese exports.
This leads to cutting corners in every material input down to the metal, plastic and chemicals. It generally won't show up until the capacitors dry out and die and that might take a few years. Buying a generic Chinese electronic product and expecting it last to is extremely unrealistic.
Sure, it's a hit piece from the NYT, but it's essentially correct and not complicated. Racing the bottom in cost is not going to result in lasting quality.
Now, weve known that fake parts usually made in China have been making their way into Defense Department maintenance depots for years. However, a brand new report by the SASC details how fake parts are making their way into some of the militarys newest and most advanced weapons systems. How many fake parts in DoD supply chains were discovered by the committees investigation? 84,000 from just one Chinese supplier.
You overlook the concept of maturity. That is of age and wisdom.
Mature nations and economies have developed standards and standard enforcement mechanisms. Some, enlightened nations, with new or nearly new economies have adopted wholesale the standards of the mature nations. I cite Saudi Arabia, Kuwait and the other GCC nations. Among themselves the GCC countries adopted pretty much whole the ASTM, BS, and DIN standards. Having done so they insure the importation of good stuff and for budding local companies the basis for quality. They promote global trade governed by near universally accepted standards.
China is young, infant even. The manufacturing prowess is at best 25 years old. They have not yet developed nor universally seen the need for such discipline. The discipline will be enforced by markets as the mature economies force conformance with standards having a long evolution. The GCC provides the same discipline by very rigidly enforcing the borrowed standards.
The evolution of acceptance of these international standards will creep ever more rapidly into the Chinese as time goes by. I would think that marginal quality will reduce sales while standard quality will increase sales to the point the standards will prevail. Had the computer you noted been purchased by procurers who bought standards based rather than price based quality the problem would not have risen.
Apple also demonstrates one of the problems with China's economy http://www.bloomberg.com/news/2012-01-04/apple-profit-margins-rise-at-foxconn-s-expense.html which will preclude their becoming a high quality manufacturer.
When we crash, China crashes harder (whipsawed): http://www.paulmidler.com/wp-content/uploads/2010/06/1.gif The Paul Midler site also has tons of other reasons that China sucks and always will.
Go to www.cpsc.gov/ and sign up for daily recalls and watch how many come from China.