Sunday, July 15, 2012

Hmmm... a China slowdown. Surprised?

 Just the other data I read a report about growth in China slowing.  Sure it's still high, at 7.6%, but it's the slowest in 3 years.  And it's still hard to understand if the data we get from China is reliable.  I think not, so the fact that we're seeing announced slowing, means it's likely slowing more than that.  Most analysts are calling this a soft landing.  But if any of the bubbles that are in China decide to burst.  The soft landing ain't going to be so soft.

Chinese officials hoped to ease fears by announcing a growth in retail sales and new bank loans, but those are obviously lagging indicators.

Another notable issue is the observation that coal has been available in excess.  It is apparently sitting in supply depots as demand slows. 

At least the US is still investing in China with those 2012 United States Olympic uniforms being manufactured there.

I can't say I'm too surprised by this turn of events.  First of all, with the rest of the world suffering, there's no way that China can continue to grow like they have.  Secondly, the Chinese have not put any measures in place to clean up their economy.  If you've ever visited China - you'll know what I'm talking about.  Extreme rich and extreme poor in the same neighborhoods.  Little infrastructure outside of major cities.  Incredibly high prices in cities.  Incredibly low in the countryside.  And of course, government and local corruption ever prevalent. 

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