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China Sputters as statistics take it the other way..| Advantage China

Portrait of Mao Zedong at Tiananmen Gate

Image via Wikipedia

The news on retail spending was yet another conundrum to behold as China’s weekend stats showed retail sales growing by 17% for May and manufacturing growth by 26% The surprising thing is that this retail sales growth number is actually a sign of slowdown in Consumer spending in the highly skewed Chinese economy as the 17% is accounted by inflation in food and probably the continuing pressure on Real estate. It does mean that instead of growth because of Consumer spending as desired, growth is coming out of Manufacturing investments risking running empty industries as GDP growth will continue to be on the hammock than the nosediving adventure rides feared.

In UK for example where a recession is taking hold even as BoE hasn’t yet tightened policy, retail sales incl Fuel;l went down 1.5% and similar conditions prevailed though on the inflationary side in India However most serious opinions regarding a hard landing in China are in place and buzzing media since the report appeared last week, US Retail sales were up 5% in May a welcome relief, maintaining retail growth ex fuel and ex autos

Stuck in a corner, The Economic Times also did a good analysis of the China situation after ages of mediocrity sloughing off ( probably the falling leadership, definitely no Mao Tse Tung followers bushing them here) and it was great to hear Indian networks taking it up on Bloomberg UTV and ET Now

Coming back to China’s hard landing troubles, it will be a mess because of over supplies and large inventories, the same they had from the last construction spending boom and thus something they will be able to take care of, as they try to push growth westward within China and grow an even pace of urbanisation for the 70% urban populaion expected in 2015

2 comments on “China Sputters as statistics take it the other way..| Advantage China

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