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china economic slowdown STOCK.com


Nov 13 2014, 8.38am GMT


As the figure slips on annual Chinese production from 8 percent to 7.7 percent, property and environmental issues come to the forefront.

China’s growth is slowing with factory output recording its 32nd decline in a row. Other data regarding pressure on China’s economy is evident:

  • Fixed investment growth is down to a 13-year low, having found downward momentum since a peak in mid-2009. Actual 15.9%, forecast 16.0%, previous 16.1%.
  • Despite the $9.3 billion spent on Alibaba’s singles day, which may show in the December report, figures relating to October showed a lower than expected year-on-year  Retail Sales figure of 11.5%, the forecast being 11.6% and previous 11.6
  • According to Bloomberg, ‘Leaders have discussed lowering the 2015 economic-growth target from this year’s 7.5 percent aspiration.’
  • Construction figures are toppling.

In the last October press release from China’s bureau of National Statistics, construction registering a year-on-year decrease of 9.3 percent with a flurry of depleting figures: newly-commenced residential units decreasing by 13.5 percent; total area of residential real estate sold decreased by 10.3 percent; total sales of commercial residential buildings decreased year-on-year of 8.9 percent, and the sales of residential real estate decreased by 10.8 percent.

The reasons for China’s economic slowdown are varied, but the figures on property development are aligned with both the decrease in fixed income growth, and China’s commitment on reducing pollution especially in Beijing.

The effect of environmental controls will be under even closer scrutiny following a new round of talks between China and the US going on now between President Obama and President Xi. China’s new commitment sees Beijing agreeing to increase the proportion of non-fossil fuel into its energy consumption to around 20% by 2030.

In the meantime Bloomberg reported ‘The People’s Bank of China is inviting selected city commercial banks in some provinces, including Jiangsu and Zhejiang, to apply for cash injections’, heralding the possibility that reform and liquidity injections may increase to stem the negative growth trend.

Nikkei added 1.1 percent to a seven-year high.

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