An unexpected slowdown in China's economic growth has cast fresh doubt over the strength of its recovery, sending jitters through the stock markets.
Gold prices have dropped to a two-year trough due to fears of central bank sales and less monetary stimulus which could reduce demand to hedge against inflation.
Mixed signals from the economic giant in recent weeks have suggested that recovery in the economic giant remains fragile.
An apparent import boom fuelled hopes of growing Chinese consumer demand - considered a pillar of robust recovery amid sluggish growth in China's key trading partners, the US and EU - but the picture was muddied as inflation fell in March.
Such patchy figures have led analysts to question whether China's growth is still dependent on government spending and lacks the strong underpinning required from increasing consumer demand.
Slower spending on factories, real estate and other fixed assets, which rose 20.9pc in the first quarter, down from the 21pc rate for the first two months of the year. shows the economy suffers from structural problems, such as excess production capacity in some industries, according to Societe Generale economist Wei Yao.
"Given all this credit injected into the system, the future should look better," he said. "Nevertheless, the level of efficiency in the economy has declined. The same amount of money will no longer produce the same amount of growth."
While China's own growth target for 2013 stands at a modest 7.5pc, global forecasters keenly expect of a rebound for the world's second biggest economy after growth slowed to a 13-year low in 2012.
The Asian Development Bank predicts China's economy will expand 8.2pc this year, while the World Bank hopes to see an 8.3pc uptick even after a downward revision following last week's cut to the global trade outlook from the World Trade Organisation.
"Analysts still question whether China's growth is the result of government spending...." It's ALL government spending and paper-money printing, wherever you look. Watch out for the backlash when inflation hits.
......... Watch out for the backlash when inflation hits....
China's inflation rate is only 2.1%.
What backlash would it be?
China is the ultimate expression of the mystic swamp manifest in all its grim realities! China cannot maintain grow because its economy is one giant illusion predicated on building concrete towers of misery and fake gardens.
The globalists had a dream, and thought China could provide a never ending pot of gold - but failed to factor in all the corruption that stifles its vast population. Hundreds of millions of 'potential' consumers might produce a domestic consumption boom that could save the global economy from the abyss - however the Chinese are still predominately a peasant nation and the CCP refuses to empower its people. The CCP is dominated by uneducated thuggish slave masters and they enjoy the advantages far too much. If they had any real freedom or competitive markets mos tof these morons would find themselves living in the gutters.
What China should do is raise the wages of the 'workers' and open up its domestic markets to imports - but the shops are barren - imports are scarce apart from the luxury products demanded by the elites ! All those reasonably priced consumer goodies, and quality products the west takes for granted are completely missing from Chinese shops - and those that do get through the state corruption are so expensive the peasants can't buy.
China is destined to fail. Not one of the 'statistics' produced by the CCP can possibly be accurate or reflect reality in China. There is something quite odd about the whole country! The holes are everywhere. The faces tell the story too vividly to deny.
After 5 years being dragged round zhuhai/Shenzhen Beijing enormous shopping centres my tired old bones can testify to the opposite- shops in china are not bare of produce- in fact anything but and my Chinese staff love shopping on their day off almost as much as sleeping. Don't know where you were but you missed a treat - wished the shops were empty. Cheers
...........China is destined to fail.....
Fall from7.8% to 7.6% growth!
It is peanut change, Daft!
Whilst the UK growth rate is nearing zero or negative, is presumably destined to succeed!
Don't make fool of yourself, Daft.
Concentrate your work as a failed moderator on DT.
China is slowing down to 6pc growth is it time Africa was the growth engine for a change. The West needs to look at Africa, massive market if corrupt leaders were replaced
What a surprise, China subsidises it's economy to flood the world with cheap tat. Now the world is flooded and some people believe good is not cheap and cheap is not good and so the export market has faltered and will continue to do so. China is going to the dogs and will be offloading gold anytime soon. Hence the gold and commodities crash. We are only a few days in and things should get much worse this week. Cash will be king again.
The gold and bond market are telling us that the world is heading for depression.Money printing is TRADE PROTECTIONISM by the back door.This will lead to world recession and then depression.In a depression all assets lose their value and money is king.Gold is just another asset and so is losing value.Other recession indicators are,Oil is dropping,Commodities are dropping.Bond yields are dropping.The only reason equities are rising is because central banks are flooding the system with money, but this is totally artifical and will collapse shortly.So move to money and go for Dollars.
1. Beijings biggest fear is political unrest- its only a matter of when not if, and the current cohort dont want it on their watch. Therefore if they let inflation run rampant the new middle classed will be upset - so for the first time ever Beijing has to think about what the masses want.
2. Any slowdown will pop the property bubble causing massive asset price deflation. They hope to control this but they cant. A lot of people will lose a lot of money.
3. There is so much corruption it is easier for manufacturers to move to Vietnam etc. where business ie easier and wages lower.
4. US consumers are still wary and QEternity has not put the money in their pockets, but only into the pockets of Wall Street gamblers and those who brought you 2008.
5. Huge numbers of middle class are buying real estate in stable countries like the US, UK, Australia, anything they can lay their hands on. This has caused local regionalised asset price inflation, so as the Chinese bubble will pop, some of these people who afterall dont have jobs where they have bought the properties, some of these people will repatriate some of their money causing asset price deflation on our shores also.
6. Its going to get very ugly for Austrlia.
As someone living in China, the first quarter has been smattered with holiday periods that have essentially ground the country and therefore economy to pretty much of a halt - the various festivals have had a real impact on business levels and in Japanese visitation, the on-going dispute with the Diaoyu islands has reduced that activity. The government's forecast was clearly optimistic and as business activity is now roaring ahead, if April's performance is anything to go by, the Q2 results will balance out those of Q1 as long as the North Koreans behave themselves!
How much do they pay you to blog?
Not much I hear. You would be able to get higher pay as a translator somewhere else, unless of course you would be rubbed out for disloyalty .
you're rather sad George Orwell. No-one pays me to blog and I'm not a translator - judging by your level of comment, no-one would pay you either. Allow other people an opinion
- sorry, I forgot, true democracy where you are - pity that slipped your mind.
Hi mikeinchina, I miss the place terribly. Those who have never been don't know the world. Shenzhen and the pearl river was my main area, but worked in shanghai and B. thank you for a balanced report. The media in the UK so misses the point I doubt if the journalist go out. I miss the sounds and the energy, and would return tomorrow if not for family here. Enjoy your time there, time spent studying China is never wasted, if only more people went with an open mind and heart our little country would be a better and humbler place. Good luck and ze zeh.
嗨，mikeinchina, 我非常想念中国。那些从未涉足中国的人不会懂那个世界。深圳乃至珠江领域是我主要待过的地方，但我在上海和北京工作。谢谢你中肯的解说。要是记者去那儿，我怀疑英国的媒体会偏离事实。我怀念那儿的节奏和动力，如果不是为了我在这儿的家人，我明天就回去。（译者：难得遇到对中国有好感的老外）珍惜你在那里的时光吧，你花在研究中国的时间不会浪费的。要是更多的人带着开放的思想去中国，我们这个小国家会变得更好，更加谦卑。 祝你好运。
The romantics vision of hell is always 'positive' ! You obviously did not study China very well dear....sucked in by the shiny bright lights and tall buildings no doubt, yet fail to notice its a facade predicated on illusion.
What exactly is the point of China then? Do enlighten us all......
Same as its always been. An empire with an imperial cohort with a mandate from heaven. Fabulous wealth and hideous poverty. Awesome beauty and gut turning squalor . Lies and deception and honour and comradeship. A fascination for foreigners and deep impenetrable suspicion. We are crude and gauche, and shallow and ill educated, with short history and low morals. Above all stupid. China will fall prey to bureaucratic, nepotism and corruption as it has for millenia, then it rises again to transcend all other worldly powers. For the last two thousand years it has been the greatest economic force in the world. The Pharos had Chinese silk plated in their hair. They will not bow to the west and their transient live style. They do not count the democratic cycle as the measure of time or progress but will wait a hundred years for things to turn write. Social order is all because they know what the opposite brings. Democracy is a short lived experiment 1920 s.
And doesn't provide stability, or even accountability. It's a bleak thought to china party members but if they really mess up there is no pension plan or soft job in Europe. Knowing you whole life is on the line focused the mind wonderfully and make you think long and hard about all the issues and difficulties. If Gordon was a Chinese economist he' d be very dead now for the mistakes he made, and Tony would have been shot long ago. If you take the benifits of power you suffer if you get it wrong big time in the history of China. Ask the last Ming emperor who finished his wall in1664 saw it breached in 1665 and died on the end of a silk rope. Should have paid attention. What is the point of China- good question. As a westerner it makes you face up to an alternative reality like travelling to another planet. And you see the limitations more clearly. But still as ever it is a mystery that engenders strong even fearful response. A women I met made her child learn manderin after a visit when she saw what they are doing. 70% of all the worlds concrete is used in China. So she was fearful they want to take over the west- they don't by the way. Their empire stops at the border. Whenever they go outside it means trouble and pain. Ask emperor yuan, and Mao. Running China is enough. There are no Chinese soldier outside China and they would be much happier if there were nowhere else. They want to live with their culture which is more than enough and live what they call the beautiful life. Materialism - their new import from the west does not suffice to a deeply philosophical people. But as Loazi might say to you question - what point anything. It is what it is, but the twinkle in the eye of a beloved grand daughter as she studies a ladybird is worth all the gold in the world to an old dying man. Love to hear the point of the UK from your point of view. But I guess you have lost concentration, as another butterfly goes past. [cannot get the hang of this editing process- or the spell check or the fact my dinner was ready and sister insists I eat it hot]
中国一直以来都没变。中国就是一个拥有贵族，王权神授的帝国。奢华的财富与潜在的贫穷并存；美景与肮脏并存；谎言欺骗与荣耀友谊并存；对老外充满魅力与对其人民充满怀疑。我们粗俗肤浅，没有受过良好的教育，历史短，道德低。总之，就是傻逼一个。中国则是充满官僚政治、裙带关系、腐败问题，现在他再度崛起，超越世界上其他大国。在过去的两千年里她一直拥有世界上最强的经济实力。Pharos 曾经将中国的丝绸系在他们的头发上。现在中国人不会向西方，以及他们的暂时的生活时代低头。在时间与实践的检验下，他们不认为民主社会是永恒主题，但他们需要100年的时间来写下新的篇章。 稳定压倒一切，因为他们深知反对意味着什么。20世纪20年代接纳民主只是短暂的试验（译者：可能指的是新文化运动，倡导民主和科学），但民主并未使社会稳定，乃至让人对民主产生怀疑。
Goodness knows why this is a surprise, enough people who really know, have been predicting the end of the world's largest Ponzi scheme for some years. The fall in output is only part of the indication that all is not well. You need to add to this another $1trillon of fiscal stimulus (which is bigger than that in 1Q2009) and the fact that official figures report that exports to Hong Kong rose by circa 90%. Even the Chinese authorities are investigating such a ludicrous figure, but for now it is official. The economic reports produced by China are barely fit to be used as toilet paper let alone for compiling statistics. When you have done with that try looking at cooper, coal, iron ore, and housing inventories, electricity generation figures and freight transport (less reliable as they are now being massaged as well) and you may at last accept the inevitable consequences of the laws of gravity!
Longshan, as you are clearly a Chinese reader, can you give us one or two examples of why the "economic reports produced by China are barely fit to be used as toilet paper"? How do you know figures are being massaged? What evidence?
A trillion is peanuts for China, less than US$ 760/person.
In the UK, we spend ￡ 750/person paying the interest on national debt.
Would I rather pay the city spivs or have new airports/roads/railways/metros - tough one that
With respect you miss the point. Even with this additional cash stimulus the economy shrank. In fact I would expect the real economy, based on real figures, not the rubbish published every month, by government depts. and The PBC. to be somewhere between 0 -3% in 2013 and unless Mr Xi gets his act together at lightening speed, near or in negative territory in 2014/5. What chance has Mr Xi of turning this mammoth tanker at all, let alone quickly? As of now more than half the debt in China is "lost" in the uncontrolled shadow banking system, that was devised as a means to get round government banking controls. Provincial governments bear responsibility for debts, some say equivalent to more than one year of China's total GDP. Not bad considering they are not allowed to borrow either. This and much else I don't have time to write here, simple points to the inevitable. The rally of the last 4-5 months is nothing more than what a market trader would call a Dead Cat Bounce. Hmm Gravity again!
你搞错了。即使额外的财政刺激，经济依然衰退。事实上我希望真实的经济建立在真实的数据上，不是来自每月政府部门和中国人民银行发布的垃圾。除非习快速落实其政策，否则中国快速增长势头不再。李又有多少机会来改变中国战车的转向，还是放任其快速前进？ 现在中国超过半数的债务陷入无法控制的影子银行系统，而这个系统旨在避开政府对银行的控制。省政府承担着大量债务责任，相当于中国一年的GDP总量。考虑到他们不允许外借，情况还不是很糟糕。内容太多，我没时间在这里写完，但这都无法避免。过去4-5个月的统计表明了市场交易者所称的死猫式反弹的迹象。（译者：股市行话，不太懂什么意思。百度百科解释：价格崩跌后快速地略为反弹，通常是指缺乏基本面因素支持的反弹升势，反弹之后很可能又将再度疲软。此词据称是源自这种说法： 只要跌下来的位置足够高，就算是死猫也会略为反弹。）