Chinese Government Warns World of “L-Shaped Path”: a Dive & No Recovery

[marmar]

Chinese Government Warns World of “L-Shaped Path”: a Dive & No Recovery
by Wolf Richter • May 9, 2016


[font color="blue"]Don’t count on us, it said.[/font]

It’s fascinating how Wall Street soothsayers and American industrial companies, such as automakers, hype the Chinese economy, even as Chinese government officials are getting cold feet about their economic miracle, as they’re gradually figuring out what’s going on in their construct. And now, they’re trying to prepare the world for what they see coming.

With economic growth down to the official rate of 6.7% in the first quarter, the slowest official growth rate since the Financial Crisis, soothsayers are busily pointing out that it’s still astronomical compared to the growth rates – if you can call them that – in the US, Europe, and Japan.

But now the People’s Daily, the official paper of the Communist Party and thus a government mouthpiece, published an exclusive interview with an unnamed “authoritative figure” – a description that is “usually used for high-level officials,” the paper explained. It even ran the article on its English-language site for the entire world to see.

This authoritative figure told the People’s Daily that the Chinese economy won’t see a V-shaped recovery, or a U-shaped recovery, or any recovery of economic growth, but an “L-shaped path going forward.”

So a decline followed by no recovery. ....................(more)

http://wolfstreet.com/2016/05/09/chinese-government-warns-l-shaped-dive-no-recovery-economic-growth/

[tonyt53]

1. The traditional world economic powers have a guide to what is happening

The same thing happened with Japan in the 80's. Pretty much now being mirrored by China.

[Jeffersons Ghost]

2. China influences other economies to a greater degree than Japan ever did

[DetlefK]

3. This isn't new. Economists have been warning about that for a year now.

For one or two years now, economists have predicted that China's economy cannot keep going like that because of over-capacity and environmental destruction.

For half a year to a year now, economists have warned about this: They have issued warnings that China must contract its economy in a controlled fashion or face an uncontrollable crash.

And just a few months ago, the new 5-year-plan came up with a reduced goal for economic growth.

The only ones who are in for a surprise now are the tone-deaf, greedy bastards who value making money higher than understanding money.

[Gman]

4. They've been known to be lying about productivity numbers for years

Which Wall Street has taken as real gospel.

It won't be pretty.

[Orrex]

5. Well, I'm confident that the super-wealthy are protected

And that will be true regardless of who wins in November.