《China Is In A Recession》 （Seeking Alpha）
China is in a recession. No, not in terms of official statistics, which some have been dubious about, but in terms of how much the economy is suffering on the ground. It hasn’t escaped anyone’s notice that the economy is in trouble, despite the fact that the government reported a 6.5% growth rate in the third quarter of this year. There are several important indications of China’s economic pain, including trouble in the stock market, retail sales, and industrial production.
Industrial production growth has been flat since 2015, diverging from a trend starting in the 1990s in which production had somewhat more highs and lows. It appears to meet a minimum level that it doesn’t dip beneath, perhaps for policy reasons. Fixed asset investment reached an all-time low in August 2018. Even though much of China is still under construction, it is at a far slower pace than in the past couple of decades.
The downturn has been obfuscated by economic stimulus, which has striven to make up for demand shortfalls through government spending.
Sharehoarder : I wonder how Chinese tech stocks would fare now that the US government has asked allies to stop using Huawei….
T tbaWhynot?Windsun3 : Did anyone honestly think high single/low double digit growth could go on forever? The slow growth can be attributed to simple mathematics and the power of compounding. And how is China’s economy struggling? Markets are down, sure, but median income is rising, poverty is plummeting, and global influence is only growing.”… striven to make up for demand shortfalls through government spending” people were using this argument back in 2010 for why the US was going to double dip after the recession. Yet since then we’ve been on the biggest bull run since practically forever. How much lower can China get, given that decent growth is almost certain? Their largest companies are trading at discounts never seen before, and their underlying businesses are solid.Fears are insanely overstated in China.
Whynot? : No, it can be attributed to toxic stimulus measures propping up institutions that cannot compete and unseen debt levels. She explained very clearly why China’s economy is struggling. If you are relying on state spending for all your GDP growth which has been what they’ve done, you get stuck with massive waste, massive debt levels and consumption levels that cannot be maintained. There are many reasons why people fear China. Massive corruption, theft, government propping and trade relations that are not one sided, authoritarian tendencies on a massive scale I mean the list goes on.
JLow50 : Meanwhile in the US everything is great! Housing is down, Car sales are down, the market is tanking, interest rates are rising, plus we are getting are easily winnable trade war.
june1234Windsun33 : For the first time in decades Chinese auto sales face their first decline, a decline even more pronounced in big ticket items like home appliances.
Windsun33 : Car sales in China has been ready to drop for quite some time. Cities are so overcrowded with cars that some have odd/even drive days, and the local registration fees for a license can be more than the cost of the car. Other sales drops such as durable goods are a lot more troubling.
Random Logic : Who knew that multinationals have for decades now generated a disproportionate amount of their emergency room growth from the middle kingdom?! Shocking.
Windsun33 : China’s global influence might be growing, but lately it has been in a negative way. Their soft power has been declining for at least the past 3-4 years, and lately has gotten worse. Their reputation for human rights and law is even worse than the GOP, and the populace is getting restless.