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Gross domestic product

This tag is associated with 35 posts

Understanding the two Chinas


Our view that China may be heading for a mild cyclical upswing next year needs to be set against the background of the broader economy, which is changing rapidly. We think that it makes sense to view the economy as consisting of two parts: old and new. In its latest Five-Year Plan—full details of which … Continue reading

China has a $1.2 trillion Ponzi finance problem


Chinese borrowers are taking on record amounts of debt to repay interest on their existing obligations, raising the risk of defaults and adding pressure on policy makers to keep financing costs low. The amount of loans, bonds and shadow finance arranged to cover interest payments will probably rise 5 percent this year to a record … Continue reading

China’s economy is worse than you think


The unreliability of Chinese official economic data has become almost a cliche. A few years before he became China’s premier, Li Keqiang said that the country’s numbers were “man-made” and “for reference only.” If the top economic policy maker of a country says that the numbers aren’t reliable … well, you believe him But how unreliable? … Continue reading

What could really disrupt China’s economy?


In an earlier post, I explained why I’m still bullish on China’s economy. But as the events of the past few months have shown, the risks of economic disruption are real. Here are several potential risks that could throw China’s economy off track. While the likelihood of all of them occurring is low, they are … Continue reading

International investors are pulling out of China in favour of India because of China’s interference in stock market


The tumult in China’s stock markets has turned into a blessing for Indian shareholders. International investors are pulling out of China, fuelling record outflows through the Shanghai-Hong Kong exchange link, amid a $2.8 trillion plunge in mainland equity values since June 12. They’ve ploughed $705 million into India over the same period, sparking a world-beating … Continue reading

India to beat China again as fastest-growing economy in 2016 says IMF


India will be the world’s fastest growing economy for the second consecutive year in 2016 at 7.5 per cent, IMF today said, even as it lowered its current year global economy growth forecast to 3.3 per cent. In its World Economic Outlook Update released here, IMF retained India’s growth projection for current year at 7.5 … Continue reading

Putting China’s debt into perspective


China’s total debt quadrupled between 2007 and 2014, which was about one-third of the $57 trillion in debt added globally during that period. Can this possibly be safe? To answer this question, the McKinsey Global Institute devotes an entire chapter to China’s debt in the new report Debt and (not much) deleveraging. The key issue … Continue reading

Cadence of Conflict: Asia, April 20, 2015


China’s economy is getting “worserer and worserer”. Their progress seems to have been hyped. Then again, that could be said of everyone. Banking is all over the news—all over. But the real reasons for such economic conflict and shuffling between West and East remains unsaid. The US is spread too thin. Taiwan is focusing on … Continue reading

Asia’s dominance in manufacturing will endure – that will make development harder for others


By making things and selling them to foreigners, China has transformed itself—and the world economy with it. In 1990 it produced less than 3% of global manufacturing output by value; its share now is nearly a quarter. China produces about 80% of the world’s air-conditioners, 70% of its mobile phones and 60% of its shoes. … Continue reading

China’s real GDP growth rate plummets to 1.7 percent, not the 7.4 percent reported by the government


Diana Choyleva of Lombard Street Research, who produces an “unmassaged” calculation of China’s true economic growth, just reported that China’s fourth quarter GDP growth plummeted to 1.7 percent, versus the official 7.4 percent rate. According Choyleva, “Dire data out of China are competing head-on with the Greek political drama as the most destabilising factor for … Continue reading

China’s long-awaited day of reckoning is close


All the devils have come together for the Chinese economy and the country’s “long-awaited day of reckoning” is upon us, writes Societe Generale analyst Wei Yao in a recent note. To China bears who’ve said that the country is a debt bubble, Wei’s conjecture will seem obvious. To bulls it raises another question: Where would … Continue reading

China argues it’s not really world’s largest economy


China‘s statistics agency said Tuesday that the International Monetary Fund is wrong in saying China has topped the U.S. as the largest economy in the world. According to the latest IMF figures based on purchasing power parity, China produced $17.6 trillion in goods and services in 2014, surpassing the U.S.’s $17.4 trillion. But China’s National … Continue reading

Why China keeps throwing trillions in investments down the drain


A recent study performed by two economists affiliated with a Chinese state agency found that China’s state investments have becoming alarmingly wasteful and ineffective. There are two indisputable facts about China’s mammoth investments in its infrastructure and factories. One, they are a growth engine, accounting for roughly half of the country’s GDP increase since 2000. … Continue reading

China poised to pass U.S. as world’s leading economic power this year


The U.S. is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies. The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in … Continue reading

Government reforms making Chinese society dangerous


As a Chinese person, I support the reforms taken by President Xi Jinping. He has planned to suppress corruption, which is the core of his reform. In addition, to consolidate the stand of China in the world, he is trying to make the Chinese government have strong attitudes towards other countries, especially Japan and Southeast … Continue reading

China needs 10 million new jobs a year to survive


The Chinese economy needs to create 10 million jobs per year and must sustain growth of at least 7.2% to achieve that, Premier Li Keqiang has warned ahead of a key meeting of the Communist Party. Li’s comments, in a speech published Monday on the website of the All China Federation of Trade Unions, indicate … Continue reading

‘Hidden income’ makes China’s rich wealthier than thought


Hong Kong — China’s urban rich are making far more than they officially report, suggesting the wealth gap in the world’s second largest economy is much higher than previously thought, according to a new study. The China Society of Economic Reform released a survey Monday that found “gray income” was 6.2 trillion yuan (U.S. $1 … Continue reading

Why China’s economy is wobbling


A $91 billion industrial project in China, mired in debt and unfulfilled promise, suggests part of the reason why China’s economy is wobbling – and why it will be hard to turn around. The steel mill at the heart of Caofeidian, which is outside the city of Tangshan, about 225 kilometres (140 miles) southeast of … Continue reading

China heading for unprecented credit bubble implosion


China’s shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned. The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying … Continue reading

Laos seeks Chinese help to survey its mineral wealth


Laos is seeking help from the Chinese government to conduct detailed surveys of its mineral wealth, aiming to use the information to help regulate the mining industry. Deputy Minister of Energy and Mines Somboun Rasasombath said as quoted in the South China Morning Post this week that he would discuss the matter with Chinese Deputy … Continue reading

Uneven economic growth in China’s regions


When looking at Chinese growth, it’s easy to think of the country as one entity, and one figure. Will GDP expand by 8 per cent this year, or “just” 7? However, China is a bit bigger than just one number. With a fifth of the world’s population in the fourth biggest country by area, distributed over many … Continue reading

Australia warned of double whammy in China’s pending debt crisis


A major Asian investment bank says the seeds of a future financial crisis in China have been sown. Nomura is warning that debt levels in China are teetering at unsustainable levels. Debt in China is believed to be between 150 and 200 per cent of GDP, pushed up by easy monetary policy the government has … Continue reading

China’s money supply not misinterpreted – China doesn’t understand


The Chinese news site People’s Daily Online recently posted an article entitled China’s money supply should not be misinterpreted defending the money printing tendencies of the Chinese government. The author, Niu Wenxin, attempts to make a case as to why China has an absolute need for all the money that it has been printing over … Continue reading

The danger of Chinese overproduction


Coal, iron ore, steel, cotton, clothing, heavy equipment, ship-building, solar cells, LEDs, and property. All of these commodities at one point or another in the last year have been a hot topic due to overstocks caused by government-influenced overproduction. Falling prices and decreased global demand have crippled many participants in these industries, and many bankruptcies … Continue reading

China set to surpass US in R&D spending in 10 years


China‘s overall R&D is a little more than half that of U.S. and growing rapidly; U.S. is stalling. It was a ghost who revealed to Ebenezer Scrooge the “shadows of what may be,” but today we rely on studies for similar, if not equally dramatic insights. One such study, released last week, predicts that 2023 … Continue reading

US Intelligence: China economy to surpass US by 2030


A report on global trends prepared by the U.S. intelligence community notes that by 2030 China is likely to have surpassed the United States as the world’s largest economy. The report suggests the United States would likely serve as “the first among equals” in a multi-polar world. “China alone will probably have the largest economy, … Continue reading

Bank of America is bullish on China


Merrill Lynch‘s China economist Ting Lu just published a big bullish 11-page report in which he cranked up his GDP estimates citing “across-the-board green shoots. “Here’s a summary of his revisions: 4Q12 year-over-year GDP growth to 7.8% from 7.5% 2012 annual GDP growth to 7.7% from 7.6% 2013 annual GDP growth to 8.1% from 7.6%, … Continue reading

China approves $157-billion infrastructure spending to pump flagging economy


China has given the green light for 60 infrastructure projects worth more than $150-billion as it looks to energise an economy mired in its worst slowdown in three years, fuelling hopes the world’s growth engine may get a lift from the fourth quarter. Shares and steel futures contract prices jumped on the plans to build … Continue reading

China’s Rail Cargo Volume Just Turned Negative For The First Time Since 2009


China‘s vice premier Li Keqiang was widely reported to have said that China’s GDP figures are not reliable.  According to Reuters, he is said to be relying on electricity consumption, rail cargo volume, and banking lending. In case you have not been watching, the rail cargo volume growth on a year-on-year basis has just turned negative in … Continue reading

China Aims to Drive Domestic Consumption


China is currently facing a spending crunch from Europe and the U.S., which is impacting the economy and threatening a possible “hard landing.” The superlative growth over the last decade has largely been fuelled by export demand for cheaper Chinese-made goods. The country built thousands of plants and added significant capacity to handle the significant influx … Continue reading

China: Downturn pressure unexpectedly great in Guangdong


Guangdong, a pioneer province for reform, is now under unexpectedly great economic downturn pressure. In its report yesterday, China’s official media chinanews.com reported that “Guangdong Governor Zhu Xiaodan was at a meeting to analyse the economic situation in the first six months this year, held on July 11 by the provincial government. Zhu said that … Continue reading

Flaws in China’s economy mean tough times ahead


Shujie Yao says serious structural flaws in the Chinese economy mean the days of near-double-digit growth are over. The nation must now prepare for three years of hardship, which will be felt by the rest of the world. The world’s investors sift through the semantics of China‘s economic policy pronouncements with increasingly desperate optimism. As … Continue reading

China second quarter GDP growth seen at 7.5 percent


China‘s annual economic growth could slow to 7.5 percent in the second quarter, largely due to curbs on the property sector and headwinds from external demand, the State Information Center, a government think-tank, said in a report published on Friday. If the GDP forecast is accurate, growth in the second three months of 2012 would … Continue reading

China’s ‘epic’ property bubble about to burst


Notoriously bearish on China, Kynikos Associates president Jim Chanos is continuing to caution investors to brace for China’s real estate bubble to burst. The hedge fund manager also sounded the warning bell about the outlook for Chinese inflation. “We’re bearish on China’s property sector and the credit sector,” Chanos told CNNMoney at the Milken Institute … Continue reading

The risks of a Chinese hard landing


With the Chinese economy seemingly in the midst of a fairly soft landing, global investors have not been paying much attention to China in recent months. However, all that will change as a result of the extremely weak Chinese activity data for April which were published last week. Asian equities and commodity prices have already … Continue reading

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