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  • China's economic enigma

    China's economic enigma

    How is China's economy doing? The Chinese government says the economy is doing well, auto sales appear to be up, but the data are suspicious.
    China auto sales hit record 1.11 million in March
    By ELAINE KURTENBACH – 15 hours ago


    SHANGHAI (AP) — China's auto sales hit a monthly record of 1.11 million vehicles in March, exceeding U.S. sales for the third month in a row, as tax cuts and rebates for small car purchases lured buyers back into showrooms, according to industry figures.

    The China Association of Automobile Manufacturers said sales rose 5 percent in March from a year earlier, when they totaled 1.06 million, the official Xinhua News Agency reported Thursday.

    The data confirmed that sales remained robust in China, the world's second biggest auto market, despite deteriorating conditions in most major markets.

    Americans bought 857,735 new vehicles in March, down 37 percent from the 1.36 million sold in the same month a year earlier, according to Autodata Corp. more...
    Who are we to challenge the China Association of Automobile Manufacturers? For all we know their data are at least as reliable as the data provided by the National Association of Realtor's on the housing market here in the US. But the Chinese government data are strictly dubious.

    February 2009 created the chart below from data on Output and Growth Rate of Major Industrial Products from data on the National Bureau of Statistics of China web site.

    The data show dramatic declines in 26 industrial products between Oct. and Dec. 2008, the quarter the global financial system imploded. The data on power shows output off 12.4%, internal combustion engines off 50.4%, and semiconductor circuits off 19.5%. The output totals, the line items, and the total GDP reported just don't add up. But it gets worse.


    December 2008 year over year data
    We went back today to the site to compare the 2008 data to the latest reports. Alas, the data on the major industrial items that indicate rapidly declining output have either been re-categorized or removed entirely, leaving--surprise!--only minor items like fax machines showing significant negative growth.

    Automobiles, not even a category in February's report of December 2008 data, were up more than 22% year over year in February 2009, according to the most recent March 2009 report. Internal combustion engines, presumably a critical component of autos, were off more than 50% in December 2008 but are not listed in the latest report. Instead, a more general category of "Engines" is listed, off a more modest 7.8%.


    February 2009 year over year data
    Power output, a close proxy for economic growth, is not reported at all, but power capacity is. Wait, are these output data apples or capacity data oranges?

    Oh, never mind. Details, details. The Chinese government reports strong GDP growth of 9% for Q1 2009. Why should we doubt them just because the GDP the other major Asian export economy, Japan, was off 12% Q4 2008?

    And you thought US government economic statistics were unreliable.

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    Last edited by FRED; 04-09-09, 11:29 PM.
    Ed.

  • #2
    Re: China's economic enigma

    Did Larry Summers help them with that report?

    Comment


    • #3
      Re: China's economic enigma

      Originally posted by Jay View Post
      Did Larry Summers help them with that report?

      tee hee hee...

      Comment


      • #4
        Re: China's economic enigma

        What is great about any truly communist system - the 5 year plans are always fullfilled with margin and no chinks in the facade are visible.

        Might the Chinese have strayed from the straight & narrow temporarily last fall? Perhaps someone in guvm'nt statistics was temporarily deluded into thinking he was working in a capitalist system?
        Justice is the cornerstone of the world

        Comment


        • #5
          Re: China's economic enigma

          "Exports, a key driver of the mainland's economy, deteriorated for a fifth straight month, the data indicated. China's trade surplus for February had amounted to $4.8 billion."

          http://www.marketwatch.com/news/stor...&dist=hplatest

          Comment


          • #6
            Re: China's economic enigma

            Precious Fred, just precious.

            Comment


            • #7
              Re: China's economic enigma

              Originally posted by FRED View Post
              The Chinese government says the economy is doing well, auto sales appear to be up, but the data are suspicious.
              I try not to forget that this is the same ruling party that gave China "Stop on Green, Go on Red" during the Cultural Revolution (red of course being the party color). I grant that our politicians are out-racing the Chinese to the bottom, but Communist party is capable of profound stupidity. We haven't heard the last from the "Stop on Green, Go on Red" crew.

              Comment


              • #8
                Re: China's economic enigma

                china's stats bureau can improve china's gdp numbers if they add a line item for the one product they produce in ever greater quantities... lies.

                Comment


                • #9
                  Re: China's economic enigma

                  How about statistics from individual foreign brand car makers? Also lies?

                  2 minutes of Googling....

                  UPDATE: Nissan March China Car Sales Up 36% On Year - Exec
                  http://online.wsj.com/article/BT-CO-...10-702787.html

                  Beijing Hyundai sales surges 70% in March
                  http://www.chinaknowledge.com/Newswi...1&NewsID=22510

                  GM's March China Sales Up 24.6% On Year At 137,004 Vehicles
                  http://money.cnn.com/news/newsfeeds/...2_FORTUNE5.htm

                  Mercedes-Benz China sales surge 30% in Q1
                  http://www.chinadaily.com.cn/bizchin...nt_7663439.htm

                  BMW says Q1 China car sales rise 13.8 pct yr/yr
                  http://www.reuters.com/article/rbssC...34023020090410
                  Last edited by touchring; 04-10-09, 03:36 PM.

                  Comment


                  • #10
                    Re: China's economic enigma

                    Originally posted by touchring View Post
                    How about statistics from individual foreign brand car makers? Also lies?

                    2 minutes of Googling....

                    UPDATE: Nissan March China Car Sales Up 36% On Year - Exec
                    http://online.wsj.com/article/BT-CO-...10-702787.html

                    Beijing Hyundai sales surges 70% in March
                    http://www.chinaknowledge.com/Newswi...1&NewsID=22510

                    GM's March China Sales Up 24.6% On Year At 137,004 Vehicles
                    http://money.cnn.com/news/newsfeeds/...2_FORTUNE5.htm

                    Mercedes-Benz China sales surge 30% in Q1
                    http://www.chinadaily.com.cn/bizchin...nt_7663439.htm

                    BMW says Q1 China car sales rise 13.8 pct yr/yr
                    http://www.reuters.com/article/rbssC...34023020090410
                    enigma indeed. who's buying all of those cars? has china been able to turn on a dime from an export growth to a domestic demand based economy?

                    Comment


                    • #11
                      Re: China's economic enigma

                      Originally posted by metalman View Post
                      enigma indeed. who's buying all of those cars? has china been able to turn on a dime from an export growth to a domestic demand based economy?

                      China has never been a credit based economy. So what if business is bad, and they are closing down their factories and laying off peasants or using the excuse not to pay wages.

                      You bet the businessmen (even the really small ones) got plenty of cash, especially when they do not need to pay wages.

                      As for the jobless peasants, they don't buy cars anyway, so even if 50 million peasants gets unemployed, it won't affect car sales.

                      Comment


                      • #12
                        Re: China's economic enigma

                        Originally posted by touchring View Post
                        China has never been a credit based economy. So what if business is bad, and they are closing down their factories and laying off peasants or using the excuse not to pay wages.

                        You bet the businessmen (even the really small ones) got plenty of cash, especially when they do not need to pay wages.

                        As for the jobless peasants, they don't buy cars anyway, so even if 50 million peasants gets unemployed, it won't affect car sales.
                        as good a theory as any.

                        Comment


                        • #13
                          Re: China's economic enigma

                          Originally posted by metalman View Post
                          as good a theory as any.

                          There are many ways to boost domestic consumption when you have room for consumer credit growth. If the West can do it, so can China.

                          The Singapore government is doing the same thing even though the effect may not amount to much due to extremely small domestic market. Previously, anyone earning less than $20,000 a year couldn't get a credit card or unsecured personal loan, now they relaxed the rule....

                          Comment


                          • #14
                            Re: China's economic enigma

                            According to today's NY Times article there's a $730 subsidy introduced last month for car buyers in rural areas, and the sales tax on those cars went from 10% to 5%.

                            http://www.nytimes.com/2009/04/11/bu...1electric.html

                            The article seems to indicate that China favors consumer-based subsidies instead of directly to the industry.

                            Mr. Zhang said that with a greater emphasis on incentives for electric car buyers, “we will cut back on the discretionary power of government agencies — otherwise, the companies will just fight for subsidies.

                            How did China figure that out, and we didn't? Bastards.

                            Comment


                            • #15
                              Re: China's economic enigma

                              Originally posted by flyer38 View Post
                              According to today's NY Times article there's a $730 subsidy introduced last month for car buyers in rural areas, and the sales tax on those cars went from 10% to 5%.

                              http://www.nytimes.com/2009/04/11/bu...1electric.html

                              The article seems to indicate that China favors consumer-based subsidies instead of directly to the industry.

                              Mr. Zhang said that with a greater emphasis on incentives for electric car buyers, “we will cut back on the discretionary power of government agencies — otherwise, the companies will just fight for subsidies.”

                              How did China figure that out, and we didn't? Bastards.
                              our commie gov't has a lot to learn from theirs.

                              Comment

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