China in RECESSION! DEFLATION next!

China in RECESSION! DEFLATION next!

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The CCP is OBSOLETE

Port Moody, Canada

#1 Jul 22, 2013
China risks deflation trap as true GDP crumbles

China is sliding towards a deflation trap and may be in outright recession already if data are measured accurately, with serious knock-on risks for the global economy.


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It is claimed China has suffered a deflationary trade shock over recent months, partly from the country's semi-fixed link to a rising US dollar Photo: AP


China's true growth rate using electoricy and freight data


GDP deflator predicted Japan's Lost Decade

By Ambrose Evans-Pritchard
8:23PM BST 21 Jul 2013


“It is too late to avoid a hard-landing,” said Patrick Chovanec from Silvercrest Asset Management and a former professor at Beijing’s Tsinghua University.“To keep growth going they have to push extremely high levels of investment to even more extreme levels, and that is becoming very hard to do and very hard to finance.”

“The economic return on credit is rapidly declining. They increased loans by $1 trillion in the first quarter, but growth slid anyway and is now below levels seen in early 2009 after the Lehman crisis. It is no longer out of the question that GDP will actually fall,” he said.

Diana Choyleva, from Lombard Street, said the official Chinese figures show that the economy contracted by 0.2pc in the second quarter, rather than growing 1.7pc (7.5pc year-on-year) as claimed by the government.

The discrepancy comes from the inflation assumptions used by Beijing. The government relies on a fixed basket of prices that can flatter the true health of the economy.

A better benchmark is the “GDP deflator”, which uses an evolving measure of prices that better reflect the reality of China’s fast-changing economy.“If you measure it that way, China is much closer to deflation than people realise,” she said.

....
The CCP is DYING

Port Moody, Canada

#2 Jul 22, 2013
...
.....
Mrs Choyleva said the sugar rush from last year’s credit growth has worn off. The country is facing a witches brew of an over-valued yuan, stagnant exports and higher borrowing costs.

"China is within a hair's breadth of outright deflation," said Albert Edwards from Societe Generale, insisting that the GDP deflator is the key indicator to watch as the investment bubble deflates. It may prove more of a threat to the world economy than the tapering of bond purchases by the US Federal Rserve, he said.

Mr Edwards said the country has suffered a deflationary trade shock over recent months, both from Japan’s massive devaluation of the yen, and from China’s own semi-fixed link to a rising US dollar. The country has lost competitiveness after letting wage levels soar to head off social tensions or any risk of "regime change" demands along the lines of the Arab Spring.

The currency ructions are akin to events during the build-up to the East Asian crisis in 1997, when a strong dollar punctured credit bubbles across the region.

The recent focus by analysts on the GDP deflator is a new twist in a long-standing dispute over the reliability of Chinese statistics. A Wikileaks cable reported premier Li Keqiang during his days as a regional party chief telling a US diplomat that China’s data were “mad-made and for reference only”. Mr Li said he looked at electricity use, rail freight and credit growth to discern the truth.

Chinese analysts have put together a "Li Keqiang Index" using these three sets of data. It shows that China’s annual growth rate has collapsed to less than 2pc, below the worst levels after the Lehman crisis.

"The trouble is that China's data are a black box. All we know is that whole sectors of the economy that were until recently big drivers of growth have ground to a halt, so I don't see where new growth will come from," said Prof Chovanec.

Xianfang Ren, from IHS Global Insight, said China’s factory gate prices have already been in deflation for the past 15 months. This has spread wider than during the 2008-2009 crisis, reaching 20 sectors of the economy.“Industrial deflation is poisonous, as it hurts business profitability, damages balance sheets and thus stunts expansion,” she said

Lars Christensen, from Danske Bank, said Japan’s experience at the onset of its Lost Decade in the 1990s offers a salutary warning for China. The GDP deflator began to slide long before headline inflation and proved to be a much more reliable indicator of trouble to come, though the Bank of Japan did not realize it at the time.

The risk is that China could continue to focus on the wrong indicator, tightening monetary and credit too hard, and tipping the economy into deflation trap. The Japanese are still there 15 years later.
The CCP is DYING

Port Moody, Canada

#3 Jul 22, 2013
Told you so!
OVERTHROW the CCP PIGS

Port Moody, Canada

#4 Jul 22, 2013
""The trouble is that China's data are a black box. All we know is that whole sectors of the economy that were until recently big drivers of growth have ground to a halt, so I don't see where new growth will come from," said Prof Chovanec.

Xianfang Ren, from IHS Global Insight, said China’s factory gate prices have already been in deflation for the past 15 months. This has spread wider than during the 2008-2009 crisis, reaching 20 sectors of the economy.“Industrial deflation is poisonous, as it hurts business profitability, damages balance sheets and thus stunts expansion,” she said "

China is already in recession, but the manipulations, secrecy, and propaganda lies of the dying CCP obscure the fact.
The CCP is DYING

Port Moody, Canada

#5 Jul 22, 2013
"“It is too late to avoid a hard-landing,” said Patrick Chovanec from Silvercrest Asset Management and a former professor at Beijing’s Tsinghua University.“To keep growth going they have to push extremely high levels of investment to even more extreme levels, and that is becoming very hard to do and very hard to finance.”

“The economic return on credit is rapidly declining. They increased loans by $1 trillion in the first quarter, but growth slid anyway and is now below levels seen in early 2009 after the Lehman crisis. It is no longer out of the question that GDP will actually fall,” he said.

Diana Choyleva, from Lombard Street, said the official Chinese figures show that the economy contracted by 0.2pc in the second quarter, rather than growing 1.7pc (7.5pc year-on-year) as claimed by the government. "

So, China is at negative growth already, and the recession has begun!

The "silver lining" for China is that even a mild recession will destroy the illegitimate, incompetent, and corrupt CCP regime!

SWEET!
The CCP is DYING

Port Moody, Canada

#6 Jul 22, 2013
"China is sliding towards a deflation trap and may be in outright recession already if data are measured accurately, with serious knock-on risks for the global economy. "

"IF data are measured accurately", which is to say in the real world and not some shabby CCP opium dream.......

It's all falling apart now for the decaying CCP that clearly is on its last legs.

It's a GOOD thing!
The CCP is DYING

Port Moody, Canada

#7 Jul 22, 2013
""China is within a hair's breadth of outright deflation," said Albert Edwards from Societe Generale..."

AND a "hair's breath" from the overdue and badly-needed regime change and political progress that will inevitably follow!
The CCP is DYING

Surrey, Canada

#8 Jul 23, 2013
Funny how not one of the Wu Mao Dang has the rocks to comment on THIS, eh?

HA HA HA HA HA HA HA HA!
The CCP is DYING

Surrey, Canada

#9 Jul 24, 2013
They also know the facts, but are paid to hide them!

Pretty SAD!
Stranger

Dubai, UAE

#10 Jul 29, 2013
I was thinking, how can Miroscratch manage an economics word like DEFLATION let alone the concept. Then it struck me..

All her words are quoted! She cannot use the English language!

Canada can do better, i mean Da Shan was a language guru and HE was,still is, Canadian. Hopefully..
Stranger

Dubai, UAE

#11 Jul 29, 2013
All those years sittibg by a computer,she must have spider colonies in her nether regions
Stranger

Dubai, UAE

#12 Jul 29, 2013
Whats sad is you Miro. I thought you people only existed in Ben Stiller movies, now i know where he gets his inpiration. Poor poor Canada
Stranger

Dubai, UAE

#13 Jul 29, 2013
In fact, i need no reference to Canada, Britain, Da Shan, spider colonies or Ben Stiller or movies.

Mirotry is just one colosally inane annoying loser sad bitch. To write amything else would be dishonest.
The CCP is DYING

Surrey, Canada

#14 Aug 6, 2013
HA HA HA HA HA HA HA HA!

Funny how not one of the Wu Mao Dang has the rocks to comment on THIS, eh?

But of course they can always spew Red Guard-style hate!

See the desperate communist clown above?

FUNNY!

HA HA HA HA HA HA HA HA!
i hate ccp AND you

Rabat, Morocco

#15 Aug 6, 2013
Red guard style?In what way? Why do I have to be a red guard just because I dislike you? Why is it you're for me or your a red guard? Why are you so so important?
Why is it that everyone on this site,even those who distrust CUP,have a patent distaste for you lies?
i hate ccp AND you

Rabat, Morocco

#16 Aug 6, 2013
Only porn actresses are this dumb. You have objectified yourself as activist. But your brain isn't.
paul SHYKORA arts

Calgary, Canada

#17 Aug 6, 2013
i hate ccp AND you wrote:
Only porn actresses are this dumb. You have objectified yourself as activist. But your brain isn't.
..you..IT..is NOT..working,here...
paul SHYKORA arts

Calgary, Canada

#18 Aug 6, 2013
...I's choose to WORK,here,in a different subtle-way,..eh..planting a ..Lush-Garden,first..here...(+ )...yada u u.
The CCP is DYING

Surrey, Canada

#19 Aug 6, 2013
i hate ccp AND you wrote:
Red guard style?In what way? Why do I have to be a red guard just because I dislike you? Why is it you're for me or your a red guard? Why are you so so important?
Why is it that everyone on this site,even those who distrust CUP,have a patent distaste for you lies?
Can't find a SINGLE, SOLITARY lie from me, though, can you?

Not a single ONE found by an army of Wu Mao over several years? Not ONE?

HA HA HA HA HA HA HA HA HA!

HA HA HA HA HA HA HA HA!

But funny how not one of the Wu Mao Dang has the rocks to comment on THIS THREAD, eh?

They just DON'T HAVE THE GUTS!

But of course they can always spew Red Guard-style hate!

Note also how ALL THAT THEY CAN SAY is to insult those who dare bring up the facts!

See the desperate communist clowns above, yourself included?

FUNNY!

HA HA HA HA HA HA HA HA!
paul SHYKORA arts

Calgary, Canada

#20 Aug 6, 2013
..well..maybe,here ..but first FEED the rural peasant people/Folks...eh..

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