Chinese authorities unfazed by hard landing

From Forexlive, comments from National Bureau of Statistics of China spokesman Sheng Laiyunon GDP figures:

  • Employment, inflation and market expectations are basically stable
  • China’s major economic indicators in reasonable range
  • China growth slowdown positive for structural adjustment
  • Services industry development is accelerating and consumption growth is solid
  • China faces downward economic pressure, mainly because of domestic factors
  • China power output fall partly due to energy efficiency
  • China’s domestic demand has big potential

No big bang stimulus coming.

Comments

  1. No major impediments to the Chinese government ‘re-balancing’ the economy towards consumption and services and away from concrete and steel stuff.

    All they need to do is to allow wages to rise at a steady rate and the citizens of China will do the rest. Sure this will put their export industries under pressure but providing they can maintain their trade balance neutral or close to it, those industries can be re-orientated towards domestic production – just at a lower, less quality or feature rich, price point.

    Of course they need to keep an eye on inflation but that may be less of a problem considering the deflationary pressures being exerted by their energetic credit growth in recent years. Experimenting with a modest and undeclared program of “QE for the People” seems somehow appropriate for the CCP.

    Not that any of this will be much comfort for Australia’s Quarrymen – or Joe or Colin for that matter.

  2. My greatest concern wrt China’s hard landing is that China has more than its fair share structural / operational loss making entities that have been covered up with paper gains. Unfortunately when the paper gains are removed, what’s left often aint worth salvaging…could get very ugly very quickly.