Chinese Economics Thread

[escobar]

Please, Log in or Register to view URLs content!

The National Tourism Administration (NTA) data showed Tuesday that the tourism industry's total revenues reached 1.28 trillion yuan (202 billion U.S. dollars) in the first half of the year, up 17.3 percent year on year.

The surge followed a 14.6-percent rise in the number of domestic trips made during the period, which totaled 1.55 billion. Revenues from domestic travels hit 1.13 trillion yuan, up 20.1 percent, vice chief Wang Zhifa of the NTA said at a tourism conference in Shenyang, capital of Liaoning Province.

During the first half of the year, the number of inbound trips hit 28.35 million, up 1.3 percent, Wang said.

Chinese made a total of 38 million overseas visits during the period, up 18 percent, Wang said.

 

[escobar]

Please, Log in or Register to view URLs content!

China's automobile sales hit 9.6 million units in the first half of the year, up 2.93 percent year on year, data released Wednesday by the China Association of Automobile Manufacturers (CAAM) showed.

Auto output during the period hit 9.53 million units, up 4.08 percent year on year, according to the CAAM data.

Sales of passenger vehicles hit 7.61 million units, up 7.1 percent, while production hit 7.6 million units, up 7.9 percent, the data showed. Sales and output of sport utility vehicles saw the fastest growth, surging more than 30 percent year on year.

However, sales of commercial vehicles slid 10.4 percent to 1.98 million units, while commercial vehicle output declined 8.6 percent to 1.93 million units, according to the data.

China's automobile industry welcomed a boom period in 2009 and 2010. The nation overtook the United States to become the world's largest auto market in terms of sales in 2009. Sales continued to surge in 2010, jumping more than 32 percent to hit 18.06 million units.

However, sales growth became more moderate last year with a slowing economy and the expiration of policy incentives for car purchases. CAAM said auto output and sales are not likely to rebound sharply in the short-term, as the Chinese economy still faces downward pressure.

The top ten auto producers sold 8.45 million vehicles in the first half, up 4.5 percent. Their sales accounted for 88 percent of total sales, up 1.4 percentage points year on year, the data showed.

 

[albert001]

hinese Economists Society held its annual conference in New Century Grand Hotel at Kaifeng City of Henan Province, China. Under the theme of “Development beyond the Middle Income Trap”, a total of 120 papers in English and 60 papers in Chinese were presented in 45 sessions. They cover a wide range of economic topics in contemporary China.

 

[escobar]

Please, Log in or Register to view URLs content!

China was the main contributor to a 24 percent rise in new global investment in clean energy in the second quarter as large Chinese solar and wind projects raised millions of dollars of finance, said research firm Bloomberg New Energy Finance.

New global clean energy investment totalled $59.6 billion in the second quarter of this year, up 24 percent from the previous quarter but still 18 percent below the near-record high of $72.5 billion in the second quarter of 2011, the company said in a report on Wednesday.

China experienced a 92 percent surge in investment to $18.3 billion in the second quarter from the previous quarter.

"China has recently quadrupled its domestic goals for solar installations. And it has been by far the biggest market for wind turbines for several years. These figures underline the pivotal role China is playing in the clean energy sector," said Michael Liebreich, Bloomberg New Energy Finance chief executive.

The International Energy Agency said last week that China would overtake Europe as the world's top renewable energy growth market this year as Europe's economic downturn and maturing renewable markets shift the growth center to large emerging markets.

By contrast, Europe saw investment rise 11 percent in the second quarter to $20 billion, while the United States gained 18 percent to $10.2 billion, according to Bloomberg New Energy Finance.

Some of the largest projects financed in the second quarter included the 270 megawatts Lincs wind farm off the UK coast at $1.6 billion; the 419 mW Flat Ridge Wind Farm in the United States at $800 million; the 250 mW Guodian Shanxi Qinyuan Taiyue wind farm in China at $317 million and the Shanlu & Shengyu Bayannur Wuyuan solar PV plant in China at $316 million.

Despite these big deals, it is still difficult for many companies to raise equity finance, the report said.

The WilderHill New Energy Global Innovation Index, which tracks 96 clean energy stocks worldwide, stood at 115.25 points at the end of Q2, which was 75 percent below its record high last November.

Public investment in clean energy was $1.1 billion in the quarter, nearly double the record low of last quarter but 75 percent below the second quarter of last year.

Venture capital and private equity investment was $1.5 billion, down 28 percent from the last quarter and 39 percent from the second quarter of 2011.

 

[Equation]

Please, Log in or Register to view URLs content!

Do you have the data for the numbers of foreigners visiting China? Last time I heard it's just behind France and the US for tourist.

 

[escobar]

Please, Log in or Register to view URLs content!

China's economy expanded 7.6 percent year-on-year in the second quarter of 2012, slowing from 8.1 percent in the first quarter, the National Bureau of Statistics (NBS) said Friday.

The figure, which marked the sixth consecutive quarter of decline, revealed the slowest growth pace since the first quarter of 2009 and was within market expectation of below 8 percent.

On a quarterly basis, the country's economy grew 1.8 percent in the second quarter, NBS spokesman Sheng Laiyun said at a press conference.

According to preliminary statistics, the country's GDP grew 7.8 percent year-on-year to reach 22.71 trillion yuan (3.6 trillion U.S. dollars) during the first half, Sheng said.

"We should not be too obsessed with an 8-percent economic growth. Generally speaking, China's economy has run smoothly during the first half," he said.

Although the economic growth rate continued to slow in the second quarter, it was "rather good" compared with developed nations and other emerging economies, Sheng noted.

Given the sluggish external market and global economic woes, China lowered its full-year growth target for 2012 to 7.5 percent in early March, after its economy grew 9.2 percent in 2011 from the previous year.

"The weakening GDP growth was mainly due to falling fixed-asset investment, difficult operations in domestic small and medium-sized enterprises and slackened external demand," said Wang Jun, a researcher at the China Center for International Economic Exchange.

The GDP data headlined a flurry of indicators published on Friday signalling that the world's second-largest economy is slowing, boosting investor expectations of continued policy action to support growth.

Sheng reiterated the government's top priority of stabilizing growth as the country faces increasing downward pressure.

"The government will give higher priority to stabilizing growth, and continue to strengthen and improve macro-control to promote the steady and relatively fast economic growth," the spokesman said.

Other indicators published Friday showed first-half industrial value-added output rose 10.5 percent year-on-year, down from 11.6-percent increase seen in the first quarter.

Retail sales increased 14.4 percent from one year earlier in the first half, slower than the 14.8-percent growth registered in the first quarter.

Fixed-asset investment, one of the principal drivers of China's economy, grew 20.4 percent year-on-year to 15.07 trillion yuan. The growth rate moderated by 0.5 percentage point compared to that in the first quarter, and was down 5.2 percentage points from the same period last year.

Although acknowledging that property market regulation has dragged on China's economy, Sheng stressed the government will not relax its curbs on the sector for the sake of more sustainable economic development.

"Real estate regulation will effectively prevent asset bubbles from hurting the country's long-term economic growth," Sheng said, pledging to further improve regulation measures during the rest of the year.

Official data showed that investment in the property sector, which directly accounts for about 13 percent of gross domestic product, rose 16.6 percent year-on-year in the first half, down from 32.9 percent last year.

Sheng is upbeat about China's economic prospects, saying "the country's still undergoing a rapid process of industrialization, urbanization, marketization and internationalization, which will unleash huge investment and consumption potential to bolster the economy."

The spokesman also dismissed concerns over deflation, as money supply has not fallen dramatically. M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 13.6 percent year-on-year during the first half, according to central bank data.

Friday's GDP data came as the country's inflation eased to a 29-month low of 2.2 percent in June, leaving the government ample room to introduce more pro-growth measures to boost the slowing economy.

"As inflation moderated, I think there should be more policy relaxation to add to growth domestically and offset weakness in exports," said Zhang Liqun, a researcher from the Development Research Center of the State Council.

The country has been steadily loosening fiscal and monetary policies. Last week, the central bank announced surprise cuts in the benchmark interest rates for the second time in a month this year to stabilize growth.

The central bank has also cut the reserve requirement ratio -- the amount of cash banks are required to hold as reserves -- three times since November, to bolster the economy.

Liu Ligang, an economist with the ANZ National Bank Limited, foresaw the central bank will slash the reserve requirement ratio three times in the rest of the year, with the first one likely this month.

Liu said China will increase investment in public housing, railway and infrastructure construction in the second half, as Premier Wen Jiabao said earlier this month that stabilizing investment currently plays a key role in expanding domestic demand and maintaining growth.

The country will also likely increase issuance of treasury bonds and local government bonds during the rest of the year, prompting the central bank to further ease monetary policies to inject liquidity into the economy, Liu said.

 

[lostsoul]

GDP figures are usually subject to Government manipulation (west and east)...

Please, Log in or Register to view URLs content!

Forget China's Goal-Seeked GDP Tonight; This Is The Chart That Keeps The PBOC Up At Night

As we wait anxiously for the not-too-hot and not-too-cold but just right GDP data from China this evening, we thought it instructive to get some sense of the reality in China. From both the property bubble perspective (as Stratfor's analysis of the record high prices paid just this week for Beijing property - by an SOE no less - and its massive 'microcosm' insight into the bubbliciousness of the PBOC's attempts to stave off the inevitable 'landing'); to the rather shocking insight that Diapason Commodities' Sean Corrigan offers that 'Hot Money Flows' have left China at a rates exceeding that during the worst of the Lehman crisis; take a range of key indicators – from electricity usage, to Shanghai container throughput, to nationwide rail freight ton-miles, to steel output – and you will notice that none of these shows a rate of growth during the second quarter of more than 4% from 2011, and some are as low as 1%. Whatever fictive GDP number we are presented with this week, the message is clear: “Brace! Brace! Brace!”

 

[SampanViking]

Looking at what is actually going on within the economy in the different regions (interior provinces posting typical growth of 12 - 15%) plus the surge in Central Asia getting ever stronger. All I see at the moment is a transition from one phase of activity to another and would describe what we see today as just the equivalent of your car engines rev counter dropping as you depress the clutch to move up a gear.

It is worth noting also that the combined effect of all the worlds top developed economies stagnating in the middle of a chronic sovereign debt and currency crisis, is that the Chinese economy is now growing at a rate which will double it over the next ten years rather than triple it.

 

[Maggern]

Very true. The slowdown is a sympTom of the west going offline. China's been reorganizing, but now we see the final death-throws of the to-west-export heavy economy.though I do believe the gdp growth will rather stabilize rather than regain momentum. It's just physically impossible I'd say to increase consumer spending by 10-12% every year. China's magnificent growth has been caused by expanding and finding new markets, not qualitatively improving said trade (the improvement which I think rather constitute a few %points)

 

[Franklin]

GDP figures are usually subject to Government manipulation (west and east)...

Please, Log in or Register to view URLs content!

Hot money outflow may not be such a bad thing as it's helps to lower inflation. In the case of China its means that China will have to sell more of it's forex reserves that consist mainly out of dollar, yen and euro denominated government bonds that are losing value anyway because of the negative interest rates on them. It means the interest on these bonds is lower than the inflation in those countries i.e. currency depreciation. And China's forex reserves have declined by 65 billion dollars in the second quarter of this year to 3,24 trillion dollars inspite of tens of billions of dollars of trade surplus over the passed 3 months. That's surtenly prove that there is some sort of capital out flow out of China. Those hot money came to China to benefit from the housing and investment boom caused by government stimulas and now that the government is tightening they are leaving. But the biggest problem in China is that now the economy is slowing which is the stated objective of the government, they are starting to get cold feet and is beginning to stimulate again by cutting interest rate two times just in the passed month and have already lowered bank reserve requirements (BRR) 150 basis points in the passed eight months. Although the lowering of the BRR maybe in response to the lessening of foreign capital inflows. People say that China now can afford to stimulate again because of the lowering of the inflation but the inflation is not the biggest problem. The biggest problem is the massive debt overhang from the previous binge of stimulas and the malinvestments it's has created in terms of underutilized infrastructure and a stock of unsold housing inventory. China needs to allow houses that are overpriced to fall in value and needs to allow overcapacity in the manufacturing sector to be shed. This is a painful process meaning lower growth rate and higher unemployment for some time to come. But with the recent interest rate cuts and surging bank lending and talk of using investments to stabilize growth this readjustment of the economy is unlikely to happen. This will lead to short term higher economic growth but in the long run it's means more pain in the economy because of the malinvestments that is going to be made from the new round of stimulas. At the same time the government says it won't allow house prices to rise again and the measures put in place to cool the housing market will stay. Let's hope that the government in China won't go to far this time in stimlulating the economy and limited the damage. But if China goes down the road of a investment let "recovery" there will be damage done to the economy.