(Reuters) – China’s policy chiefs have about two weeks left to decide about giving the economy a proper stimulative prod, or risk parading a new Communist Party leadership to the world just as growth falls below target for the first time in nearly four years.
Factory activity is already at a nine-month low, according to the latest manufacturing sector survey from HSBC, signaling that the official August numbers for industrial production and trade published in a fortnight will foreshadow third quarter economic growth falling below the government’s 7.5 percent goal.
That is a deeply unappealing prospect for the Party’s top brass as GDP data is likely to be unveiled at roughly the same time as the new leadership in a once-a-decade power transition.
The only real option to deliver a growth spurt in the narrow time window open to policymakers is a boost to infrastructure spending. Indeed, verbal intervention may be the only answer.
“They are sending out the message that they want to stimulate the economy, but in reality that is not going to happen,” influential independent China’s economist, Andy Xie, told Reuters. “About the only tool left to them now is propaganda.”
Posted by byu2012 on August 27, 2012
WHILE South Africa’s economy is directly exposed to lower Chinese’s growth through declining demand for minerals and metals, the indirect and less obvious implications pose graver threats still.
Whether China slows or stumbles, it will substantially adjust its policies and economic model in ways which will demonstrate that a new economic era has begun.
The deck is being reshuffled and the dealer has announced a new game. It’s not that SA has been dealt weak hands in the past but rather it has played them poorly.
A new round is beginning and careless play has left this country with too few chips to benefit from bluffing at the Brics table or heading up the African Union parlour. Rather the nation’s policy makers must rapidly grasp how the game has changed.
For many years China’s impressive growth rates have refuted analysts’ predictions of a coming downfall. With recent data making clear that the country’s growth is slowing, the gloomy scenarios now being concocted seem less far-fetched. Each of the world’s dynamic economies has its own unique characteristics but they have all used aggressive strategies to spur growth. China has proven the most resilient of major economies but now that the economies of North America and Europe which drive global consumption are slowing further, China’s export-reliant growth model will lose at least some of its vigour.
Posted by byu2012 on August 18, 2012
G. Bin Zhao, Executive Editor, CHINA’S ECONOMY & POLICY and Managing Director, Gateway International Group Limited, says today at South China Morning Post, unlike CNOOC’s failed bid in 2005 to buy Unocal, its proposal to acquire Nexen has considerably more chance of success, and, on the whole, a deal would benefit both China and Canada.
China National Offshore Oil Corp announced last month that it was proposing to buy Canada-based Nexen in a US$15billion deal. This caused quite a stir in Canada, with the domestic mainstream media reporting it widely. By contrast, the response of the Chinese media and public appears rather muted.
Posted by Admin on August 3, 2012