(Economic) Trouble in China?

[marmar]

HONG KONG (MarketWatch) — HSBC’s preliminary China manufacturing survey fell to a 32-month low in November, well below analysts’ forecasts, with the reading signaling that the sector is now contracting.

The Purchasing Managers Index printed at 48 on a 100-point scale, reversing from a mildly expansionary reading of 51 in October, HSBC reported Wednesday.

Consensus forecasts had called for a 50.1 result, just above the 50 level, which separates expansion from contraction, according to CNBC.

HSBC economist Hongbin Qu said the data implied that industrial production would moderate to annualized growth rates of 11% to 12% in the coming months as domestic and external demand cools. ..............(more)

The complete piece is at: http://www.marketwatch.com/story/china-manufacturing-gauge-shows-contraction-2011-11-22


.........(snip).........


BEIJING (Caixin Online) — China International Capital Corp. warned in a recent report that banks are likely to see an increasing number of loans go bad during the first half of 2012, due in part to the scarcity of credit available to small and medium enterprises.

Based on a survey conducted by CICC in the cities of Hangzhou and Shaoxing in Zhejiang province, home to many SMEs, the report said that even though banks have loosened credit controls on SMEs, many SMEs may still suffer a credit crunch in the first quarter of next year.

Local government and financial authorities have encouraged banks to provide credit to SMEs, including subsidizing loans and requiring SMEs to constitute at least half of a commercial bank’s clients, according to CICC.

Such financial supports have helped SMEs avoid a liquidity crisis so far. But SMEs could face challenges getting loans in the first quarter of 2012, as many payments to suppliers and workers are due before the Chinese New Year, which comes in January next year. ..............(more)

The complete piece is at: http://www.marketwatch.com/story/china-bank-report-warns-of-bad-loans-in-2012-2011-11-22

[Warpy]

1. Choking off the demand side in the US

has cost them their most important market although other countries like Brazil will likely continue to improve to drive some demand in the future.

They're just not going to do as well until and unless the demand side of the economic equation is addressed here in the US. While the war against working people continues, China's manufacturing will continue to decrease.

[CrispyQ]

2. I watched the video of the empty cities this week.

Eerie. To buy a condo for $300,000, one would have to put down 50% & pay off the balance in three years. How many people in China are actually making that kind of moeny, to fill all those cities? One analyst said they are going to have a housing bubble the likes of which will make ours pale in comparison.

[DCBob]

3. I figured this was coming. China's success is critically dependent on selling cheap junk..

to the rest of the world. The rest of world is now getting poorer and poorer and cant even afford cheap junk.

[ParkieDem]

4. It's also dependent on ...

currency manipulation, a government that can do basically whatever it wants with respect to property rights and human rights, favorable banking/financial regulation, etc.

China is a beast, but fear of a "Chinese century" is overblown. Their demography is a issue as well.

[DCBob]

5. Yes.. plus the potential for social and political unrest and also enviromental issues.

There are a boatload of major issues that can bring China down from its lofty economic perch.