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Reply to @Old_Joe: In the past decade China's consume more from their growing middle class largely in the large cites. However, the consumption rate is far below that of the developed market. I suppose on an absolute base small move upward on their consumption is considerable given their population size. In the near term China's GDP will likely depend on their export business as well as the economies of the developed markets. Is it what globalization is all about?
On the export front, FMI International fund's semiannual report summarizes Asian environment very well.
"China’s growth continues to slow, as HSBC’s June preliminary PMI reading of 48.1 indicates that manufacturing has contracted for an 8th consecutive month. Home prices continue to fall, copper prices dropped to a 6-month low, and coal has been piling up in storage facilities that are now carrying record inventory levels as electricity demand has diminished. Several large U.S. and European companies are reporting weakness in China, including United Technologies, Caterpillar, 3M, Siemens, and ABB, among others. The New York Times recently reported that, “As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles,” including “overstating economic output, corporate revenue, corporate profits and tax receipts.”2 We have been skeptical of the numbers coming out of China for quite some time, so we are not surprised to see this dialogue."
Reference 2 above is provided above from NY Times, June 22. 2012.
Comments
http://www.bloomberg.com/news/2012-07-17/lockheed-may-fire-10-000-under-budget-cuts-stevens-says.html
A bit more this morning on the state of US growth. Still trouble me that so much of the economy depends on consumer spending rather than producing and exporting real goods. http://www.bloomberg.com/news/2012-07-27/economy-in-u-s-grows-at-1-5-rate-as-consumer-spending-cooled.html
http://blog.yardeni.com/2012/07/china.html
Recent article from NY Times points to the accuracy of economic data coming from the China - the situation is worse than what is reported.
http://www.nytimes.com/2012/06/23/business/global/chinese-data-said-to-be-manipulated-understating-its-slowdown.html?pagewanted=2&_r=1&ref=keithbradsher&pagewanted=all
On the export front, FMI International fund's semiannual report summarizes Asian environment very well.
"China’s growth continues to slow, as HSBC’s June preliminary PMI reading of 48.1 indicates that manufacturing has contracted for an
8th consecutive month. Home prices continue to fall, copper prices dropped to a 6-month low, and coal has been piling up in storage
facilities that are now carrying record inventory levels as electricity demand has diminished. Several large U.S. and European companies
are reporting weakness in China, including United Technologies, Caterpillar, 3M, Siemens, and ABB, among others.
The New York Times recently reported that, “As the Chinese economy continues to sputter, prominent corporate executives in China
and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth
of the troubles,” including “overstating economic output, corporate revenue, corporate profits and tax receipts.”2 We have been skeptical of
the numbers coming out of China for quite some time, so we are not surprised to see this dialogue."
Reference 2 above is provided above from NY Times, June 22. 2012.
http://www.yardeni.com/pub/CHINACB_BB.pdf