China slows
Now China’s economic growth to slow in the September quarter, but not to mention too many think fit, an important factor in addition to the recession in the west and the credit crisis. And that was the shutting down of businesses in and around Beijing forced (a radius of 300 km according to some reports) for the Olympic Games in August and September, and the impact of the earthquake in Sichuan and the early year impact of the huge snowstorms in January. When taken together the drop in growth from an annual rate of 10. 1% in the June quarter to 9% in the September quarter, is understandable. The number was low, below market estimates of a ninth 7% increase, but western and local forecasts on the Chinese economy can not be, because the exact survey of the numbers is less than ideal, as is the certainty that the statistics presented in an unvarnished manner. The 9th 0% figure for the quarter was an annual interest rate of 9 9% for the first nine months of the year, according to a tenth Rate of 4% for the first six months. That was enough for the central government moved to reveal the price of property (which help in many areas, fall), and encourage small exporters. The government said that taxes would be reduced on housing loans and tax rebates would be increased for exporters of textiles and machinery. However, the amount and timing of such policy changes were not disclosed and there is a debate about how big a stimulus package is necessary to prevent a sharper slowdown. It was the first time since the fourth quarter of 2005 that quarterly growth in China slipped into single digits, according to the Government. The 9th Figure 9% is a remarkable decrease of 12 2% for the first nine months of 2007. The trade surplus hit a record in the $ US29 billion from just over September, but this will be the latest highlight as shipments start slip. China’s industrial production grew by 15 2% over the first nine months of this year, down from the 16 3% from the first six months. The cuts in the expenditure in and around Beijing for the Games should not be forgotten, nor should the OPEC and closures of aluminum, copper, lead and zinc producers during the quarter, as they should to try and cut stocks of unwanted products and demand and output. The industrial production growth slowed to 11 3% in September. Fixed investment, a key gauge of government spending on infrastructure and factories, rose by 27 0% in the first three quarters of this year compared with 26. 3% in the first half, said the bureau. Retail sales, an important indicator of consumer spending, by 22 0% in the first three quarters of 2008 compared with the first nine months of 2007 and by 23 2% in September. These numbers are small, but interesting examples of what the Chinese government seems to do as export growth slows down: it tries to restoke domestic demand. Inflation has been tamed looks like and sink to the level of the consumer. The spiral upward surge in food prices has slowed down earlier this year. They had the main driver of consumer price inflation in 2008 and the first months of this year. But figures yesterday by the Government Office for Statistics showed that consumer inflation hits 4. 6% in September, and 7 0% in the first nine months of the year. This is much better than the 7th 9% inflation in the first half of 2008 and by a near 12-year high eighth 7% for the month of February recorded when the winter storms, the cost of electricity and energy, and the increased costs of food restriction. That pushed up food prices. The AMP’s chief economist, Dr Shane Oliver, who does not look bleak in the forthcoming Chinese statistics. He said in his weekly market that the Chinese economic data will be watched closely for indications on how quickly it is now slow down to observe. “After their return from China I must say, however, can clearly be cooling on the back of slowing exports and a property slump that while China in far better shape than the U.S. its economy.” Soon we will be on China’s factories exporting deflation to the world to speak again after the stupid “China is now exporting inflation” fears that have been the rounds earlier this year. “Said China’s government has a rare public statement on the economy Sunday, the economy may affect the global financial crisis weather. But it also said that growth, as fall the expansion of corporate profits and slow down the public revenue. The State Council said in a have declaration at the end of a board meeting of Premier Wen Jiabao that the turmoil and economic instability is a “gradual” effect on the country. He said slowing China’s economic growth will fluctuate along with corporate profits and public revenue and the capital markets continues. newsagents reported that the statement on a government website said posted: “Unfavourable international factors and the serious natural disasters at home have changed not the basic situation of the growth of the economy of our country. Our country’s economic growth has the ability and strength to withstand the risks. “China should adopt” flexible and cautious macroeconomic policies “to maintain stable growth, said the statement. Steel prices in China are about 20% down and there are reports of small steelmakers forced shrinking because of the demand. Mount Gibson, near our fourth largest iron ore exporter, has found that some buyers can not find iron ore shipments, Fortescue Metals and on Friday showed that it had been helping some Chinese customers, pleased with the freight such as iron ore on the spot and sold because of the slowdown in China. Indian Iron ore exporters have had similar problems with smaller Chinese buyers. Atlas, a smaller iron producer, made a similar announcement yesterday. IMPORTANT: AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all content is purely for general information and as such, the specific needs, investment objectives and financial situation of a particular user have been prepared not considered. Individuals should therefore talk with their financial planner or advisor before making any investment decision.