China cuts interest rates again to spur economic growth

[ExpatOilWorker]

Publicus,

Do you have a link or a chart of China's electricity consumption the last few years and 10+ years?

Edited October 20, 2015 by ExpatOilWorker

[Publicus]

They are not getting 7% annual growth, not last year, not this year, and certainly not next year.

Quite right, it is not 7%.

"China's economy grew 6.8 percent percent on-year in the third quarter, compared with 7 percent in the previous three months, official data showed on Monday.

Analysts polled by Reuters had forecast gross domestic product (GDP) in the world's second-largest economy would grow 6.8 percent in July-September period from a year earlier. The government has set its annual economic growth target at "around 7 percent" for 2015."

http://www.cnbc.com/2015/10/18/chinas-q3-gdp-up-69-y-o-y-compared-to-forecast-of-68.html

To say the least...

China's Economic Data Seen as Overstated

China's latest energy data has renewed doubts about the government's economic growth claims, despite statements of confidence in a stable performance this year.

On July 27, the National Energy Administration (NEA) said that China's total energy consumption in the first half of 2015 rose by only 0.7 percent from a year earlier, dropping from an official 2.2-percent growth rate for all of 2014.

The slack energy numbers contrasted sharply with the government's estimate of gross domestic product (GDP) growth, which held steady at 7 percent for the second quarter and first half, despite widespread concerns of weakening.

Electricity consumption was also down from 14.4 per cent growth in 2007 to a mere 5.6 per cent increase in 2008. Railway freight, another important indicator of economic activity, also declined from 9 per cent growth in 2007 to only 0.9 per cent in 2009. However, despite a significant decrease in these two key economic indicators, the official estimates for 2008 and 2009 GDP growth are still healthy at 9.6 per cent and 9.2 per cent, respectively.

http://www.rfa.org/english/commentaries/energy_watch/chinas-economic-data-seen-as-overstated-08102015104613.html

Interesting times for the UK....I'm sure some doubters would crank out numbers and tell us why these is bad for the UK economy or the CCP is going to be dead soon etc etc

A foregone certainty. None so blind as those that do not want to see.

Don't forget your political seeing eye dogs next time.

The truth about China's GDP numbers

The reliability of Chinese GDP figures has come under the spotlight once again after 30 provinces and municipalities released their latest figures recently.

If we tally up all provincial data for the first half of the year, the country produced 29.7 trillion yuan or $5.17 trillion in goods and services. It is 10.43 per cent more than the national figure released by the National Bureau of Statistics.

For China watchers, the discrepancy between provincial and national GDP figures is nothing new. This is a regular feature of the murky world of Chinese statistics.

http://www.businessspectator.com.au/article/2014/8/7/china/truth-about-chinas-gdp-numbers

"Murky" is an awfully kind word given the consistent reality of GDP data that the lawyer and English speaking PM Li Kejiang in 2007 had confided to the US Ambassador over dinner are in fact "man made" and "for reference only."

[Publicus]

Publicus,

Do you have a link or a chart of China's electricity consumption the last few years and 10+ years?

Ask and ye shall receive....

With doubts over the veracity over GDP data, electricity data, published monthly, is often used as a gauge for economic growth in China. The logic goes that even if GDP numbers don’t quite add up (and they rarely do, see here and here for an analysis of how sum of provincial GDP doesn’t equal nationwide GDP), electricity output shows what’s happening in the real economy. After all, factories turn off the lights when they shutdown.

The two strongly parallel or perhaps even match. So it is just plain incredulous for the CCP and their fanboyz to say electricity consumption, 70% of which is industrial, and GDP do not correspond.

http://breakingenergy.com/2014/02/27/in-a-chinese-kilowatt-hour-the-link-between-pollution-gdp-and-power/

[sandyf]

The wind of change has started to blow.

“The subscription to the SDDS underscores China’s strong commitment to transparency as well as to the adoption of international best practices in statistics,” said Mr. David Lipton, First Deputy Managing Director of the IMF, at a ceremony on the sidelines of the IMF-World Bank Annual Meetings in Lima.

[Publicus]

The wind of change has started to blow.

“The subscription to the SDDS underscores China’s strong commitment to transparency as well as to the adoption of international best practices in statistics,” said Mr. David Lipton, First Deputy Managing Director of the IMF, at a ceremony on the sidelines of the IMF-World Bank Annual Meetings in Lima.

Blowhard yes.

These fragment posts that express only obstinacy and that smatter little tidbits here and there throughout the thread fail to present anything coherent, substantial, significant. People who deal only in fragments can tend to miss the larger picture, as we have indeed seen.

So anyway, the link please to the quote presented in the flying post thx.

[LawrenceChee]

The wind of change has started to blow.

“The subscription to the SDDS underscores China’s strong commitment to transparency as well as to the adoption of international best practices in statistics,” said Mr. David Lipton, First Deputy Managing Director of the IMF, at a ceremony on the sidelines of the IMF-World Bank Annual Meetings in Lima.

Blowhard yes.

These fragment posts that express only obstinacy and that smatter little tidbits here and there throughout the thread fail to present anything coherent, substantial, significant. People who deal only in fragments can tend to miss the larger picture, as we have indeed seen.

So anyway, the link please to the quote presented in the flying post thx.

Could well be that or could also well be some people in this thread are connected enough to know all these data presented is hubris and the CCP being communist have a tighter mouth in knowing what's coming than a loose cannon governments which may often like to sprout transparency but have nothing to backed it up once the skeletons are released

[sandyf]

All eyes on the UK this week.

China may be the world's second-largest economy behind the US, but it has more money in the bank than any other country.

Which means the CCP Boyz current account is continuously in a surplus. Which means the CCP Chinese hoard their cash and money to keep it in the CCP China. Which means the CCP cannot possibly provide the global economy with the massive liquidity it absolutely needs.

Only the USD can do that and does do that. That is the great importance of running a current account deficit. It is the privilege and benefit of being the global forex reserve currency and the global currency of trade. Which is one of the factors that makes the USD a safe investment and a secure bet.

The Boyz have no idea of what is required or demanded of a global currency and they never will have the expertise or savvy of it. The moment a Chinese becomes a CCP they throw out the window any brains they were born with.

China invests £5.2bn in UK projects

UK is in the running to be the most expensive whore in history.

Contemptible comments, but par for the course.

The Chinese president is expected to put the seal later on China's financial contribution to what would be the first UK nuclear power plant to be built in a generation.

The wind of change.........

"Others set the stage for the RMB to play a more important global role over the longer term. (...) The RMB is ticking all the right boxes to be included in the IMF's Special Drawing Right."

[sandyf]

The wind of change has started to blow.

“The subscription to the SDDS underscores China’s strong commitment to transparency as well as to the adoption of international best practices in statistics,” said Mr. David Lipton, First Deputy Managing Director of the IMF, at a ceremony on the sidelines of the IMF-World Bank Annual Meetings in Lima.

Blowhard yes.

These fragment posts that express only obstinacy and that smatter little tidbits here and there throughout the thread fail to present anything coherent, substantial, significant. People who deal only in fragments can tend to miss the larger picture, as we have indeed seen.

So anyway, the link please to the quote presented in the flying post thx.

Click on the text.

[sandyf]

Timing in perfectly with the first day of President Xi Jinping's state visit to the UK, China's central bank issued its first yuan-denominated bonds in London, which attracted bids for more than 30bn yuan (£3.06bn; $4.7bn).

"The bonds were six times oversubscribed,"

[Naam]

two months ago China cut interest rates but till today the irrelevant raving and ranting goes on. now we have arrived at the opium wars and i soon expect postings claiming that the Chinese never produced Ming porcelain because it's a fact that the authenticity of this product goes back to the immigrants who arrived with the Mayflower.

keep up the good job "boyz"

[metisdead]

It is perfectly acceptable to report on events and give opinions, it is not acceptable to post in a manner in which to bash any specific country. One post removed.

[sandyf]

The UK and China are set to agree a number of partnerships meant to "unlock the potential" of the government's so-called Northern Powerhouse.

"The first direct flights between Manchester Airport and China are among deals expected to be approved later."

[sandyf]

two months ago China cut interest rates but till today the irrelevant raving and ranting goes on. now we have arrived at the opium wars and i soon expect postings claiming that the Chinese never produced Ming porcelain because it's a fact that the authenticity of this product goes back to the immigrants who arrived with the Mayflower.

keep up the good job "boyz"

??? Topic is titled China and economic growth, interest rates being one aspect.

[sandyf]

International Monetary Fund representatives have told China that the yuan is likely to join the fund’s basket of reserve currencies soon, according to Chinese officials with knowledge of the matter

"The Chinese officials familiar with the matter spoke before the nation took another step toward liberalizing its financial system on Friday, as the PBOC removed the cap on deposit rates. That move was paired with cuts in interest rates and banks’ reserve requirements."

[ExpatOilWorker]

International Monetary Fund representatives have told China that the yuan is likely to join the fund’s basket of reserve currencies soon, according to Chinese officials with knowledge of the matter

"The Chinese officials familiar with the matter spoke before the nation took another step toward liberalizing its financial system on Friday, as the PBOC removed the cap on deposit rates. That move was paired with cuts in interest rates and banks’ reserve requirements."

No name, no job title. Lets wait for an official announcement from IMF.

[squarethecircle]

Something else that comes to mind - I can't find a link ATM - is that the vast majority of posts on this thread would be criminal activity according to Chinese law: the powers that be in China have actively censored any discussion about what's going on. Pull out the China-bashing card but it's simply reporting on the practices of these faulty authoritarians.

[sandyf]

: the powers that be in China have actively censored any discussion about what's going on.

Are you saying that he is not allowed to speak.

[squarethecircle]

: the powers that be in China have actively censored any discussion about what's going on.

Are you saying that he is not allowed to speak.

Well he's a dictator. He can say what he wants inside China - and it looks like outside as well. Unless he's going to censor himself, of course, but he (and Putin) both strike as having God complexes. A term that applied to the early Soviet Union comes to mind: "dizzy with success." The Greeks said that men who try to play god end up facing divine punishment - maybe this is metaphor but it seems Janet Yellen is discovering this. Who knows what will happen? Now I read Caterpillar's worldwide sales are down for the 11th month in a row. Seems like this is one of the flaws of men: they try to create with their brains what can only come out of the free actions of millions. Cf: F.A. Hayek's Road to Serfdom.

Edited October 24, 2015 by squarethecircle

[LawrenceChee]

: the powers that be in China have actively censored any discussion about what's going on.

Are you saying that he is not allowed to speak.

Well he's a dictator. He can say what he wants inside China - and it looks like outside as well. Unless he's going to censor himself, of course, but he (and Putin) both strike as having God complexes. A term that applied to the early Soviet Union comes to mind: "dizzy with success." The Greeks said that men who try to play god end up facing divine punishment - maybe this is metaphor but it seems Janet Yellen is discovering this. Who knows what will happen? Now I read Caterpillar's worldwide sales are down for the 11th month in a row. Seems like this is one of the flaws of men: they try to create with their brains what can only come out of the free actions of millions. Cf: F.A. Hayek's Road to Serfdom.

I think in his actions and words he's actually very Low key and he's also showing he is not a pushover by engaging military might , suitable for a China that would like to have their interests highlighted at the world stage

I have seen world leaders who have more pomp and self pride than him.

Xi has already done what no other Chinese leader have done - he mentioned the human rights record and the need to improve ....that in itself a clear improvement and understanding of world politics ....

[Publicus]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

My how things when change, especially when China loses the ability to depreciate its currency. We will be fine. A small decrease in corporate profits to shareholders of companies like Walmart will be more than off set by the good of bringing jobs back to the US.

I am still laughing how your predictions relating China and Russia a while back are panning out. Ruble at 66, Russia depleting reserves to prop up economy, China a basket case with government interventions not working and eroding both reserves and national wealth at a dramatic pace.

The sooner the financial side of China implodes the better. Their trillions of dollars will be flooding the forex markets which which leads to velocity induced inflation in the dollar. Then the run will be on. Brazil has 295 billion dollars in treasury paper too. They will be next to liquidate to fund their expenses. Which will dump even more dollars on the forex markets. Countries don't export for the privilege of funding US profligacy. They export to pay for imports and save the difference for a rainy day and guess what, its raining. And they will soon find out that it wasn't such a good idea to save the difference with uncashed checks from the US. The first one out profits the most.

The financial side of China will indeed collapse (and bring a certain other financialized economy down with it), but when the dust settles, they still have all the capital goods in the form of plants , factories and equipment. Most of these economies live in the real world and are subject to a business cycle. They are not in the business of enforcing the petrodollar and gunpoint and running dollars through financial meth labs in New York and London.

With $11 Trillion in infrastructure needed globally between now and 2030 the cash needed to do the job and to make jobs to do the job is finally beginning to be freed up. The submerged emerging markets where the Brics are falling are leading the scramble to get on board.

Selling US T-Bills are the CCP China, Russia, Brazil, Indonesia, Mexico and other commodity based or dependent economies. Buying US T-Bills are Belgium, Luxembourg among others and, most strategically of all, USA institutional investors.

In other words, contrary to and despite the debit-credit-explanation bookkeepers of the Austrian school of Mad Max economics, the beat goes on. Increased ownership of US Government debt by Americans is an idea whose time has come. The US will continue to sell T-Bills abroad because the demand there remains strong and consistent. The new blend is the best way to continue the USDollar as the global reserve currency and as the currency of global trade.

“The worries about China selling are misplaced,” said David Ader, the head of U.S. government-bond strategy at CRT Capital Group LLC. “This was one of the great fears of the bond market, and it’s happening and we took it in stride.”

Cash hoarding has ended

http://money.cnn.com/2015/10/14/news/economy/us-treasury-debt-selloff-2015/

What Fed former chairman Ben Bernanke had always called the "global savings glut" that had long retarded investment and GDP growth has begun to modify, adjust, adapt. As global growth slows, the submerging former emerging economies have begun to convert stashed money to cash. Forex reserves will however remain significant and substantial in most instances even as submerging governments liquidate forex holdings. The bottom line is that people and societies can begin to get the significant infrastructure they need, both physical and social.

As for the submerging CCP Boyz, they are currently selling off T-Bills "by the ton" according to Bloomberg. Yet and as everyone has taken note, nobody has noticed. The demand for US Treasuries remains great, strong, consistent. Nothing else can explain how, with all the year long T-Bill selling going on by the submerged economies, the 10-year rate remains at 2.0 with no signs of any sharp or significant fluctuations. The 30-year Treasuries are moving at an even greater volume.

The CCP Boyz however just again reduced interest rates and the triple-r for their banks in what amounts to an more embarrassing irrelevant ineffective flailing to reverse their economic decline. The Boyz have run out of tricks.

So the Boyz getting more USDollars by selling forex reserves means however the Boyz have to print more yuan. This is of course because the $1 Trillion they have of foreign debt coming due next year will require more devalued yuan to pay. This occurs while exports continue to collapse, industrial production continues to recede, bubbles in property and bank credit continue to burst along with too many others bubbles to mention here.

All of which means the Boyz have to sell more forex reserves to include more T-Bills, which means the Boyz have to print more yuan which will fire up inflation while their economy continues to wobble, stumble, continuously decline. Which means of course......etc etc.

This will be recorded as not a good year for the Boyz. It is the year the Boyz began to run out of blue smoke and mirrors that had had so many across the globe thoroughly buffaloed.

[sandyf]

Li, Merkel agree on Frankfurt bourse for yuan-based trading

[squarethecircle]

Well on the subject of China's vast riches, turns out Robert Mugabe won't be accepting the Confucius Peace Prize - after finding out that the $80,000 sum was not connected to the Chinese government. And apparently China has "invested" $600 million into the mining and construction industries in Zimbabwe. One thing is for sure - China will be expanding in sub-Saharan Africa in the coming years.

http://qz.com/535220/zimbabwes-robert-mugabe-wont-be-accepting-chinas-nobel-peace-prize/

[squarethecircle]

And some more for a more positive view of China:

Bill Bonner, the noted - and highly successful - conservative American politics/economy/philosophy observer, recently posted that China is NOT failing: after opening up over the past 30 years, its middle class is the biggest on the planet.

-They lie about their statistics - (but does anybody believe that the real unemployment figure in the US is under 6%?)

-They have a two-tiered system of well-connected elites and then regular people - (but any ideas how the Clintons amassed a $125 million treasury without ever creating any actual products or services? same for Bushes)

-It doesn't need to adapt to a western style system of democracy in order to achieve its goals, it is operating under an entirely different philosophical structure that incorporates the wishes of the populace in a different manner.

Don't have a link because these points were made in an email but felt this was relevant.

Bonner adds: "Western analysts once used Chinese electric production and industrial output as key gauges of Chinese economic activity. That made sense because growing nations in the early stages of capitalism need one to produce the other."

Worth adding that the fascist/totatlitarian tactics of the CCP have the same faults as FA Hayek points out in The Road to Serfdom, but wanted to add the point it's not failing - how much it will mirror the fall of the Soviet Union, we shall see.

Edited October 31, 2015 by squarethecircle

[Publicus]

CCP Boyz just ordered their CCP operatives at their personal central bank, the People's Bank of China, to cut rates for the sixth time this year. And there are still another two full months remaining in 2015 for six more ineffective and equally useless rate cuts. Maybe beginning in January the Boyz can cut rates weekly instead of bimonthly as they've done all of this year.

The CCP's 30 year rush of its artificial command economy is in a constant and irreversible rebellion and work slowdown. It's all downhill from here and straight in to the ditch.

[Publicus]

Li, Merkel agree on Frankfurt bourse for yuan-based trading

That's nice.

[ExpatOilWorker]

The trillion yuan ticking time bomb:

http://www.bloomberg.com/news/articles/2015-11-19/china-has-a-1-2-trillion-ponzi-finance-problem-as-debt-piles-up

[Scott]

An off-topic post has been removed. The topic is about China.

[Publicus]

CCP Boyz in Beijing have now and necessarily changed their focus from reform to rescue.

Reforms by the economics reformers Xi and PM Li have not been progressing due to opposition from still strong Maoists who do not want to see the CCP copy the resource demanding Western consumer economies. The USA consumption economy especially.

Too many Chinese resist consumerism anyway for necessary savings. This is due to facts and realities. Some pecifics are:: almost no national health care, no unemployment compensation, few or feeble retirement programs, no reliable investment opportunities (investments that don't automatically bubble) and much more that militates against Chinese consumerism.

Here's the latest from the Financial Times....

For more than two decades the Chinese Communist party has offered the masses an unwritten social contract — we will manage the country and allow you to get rich, as long as you stay out of politics.

But a stock market crash and a series of policy mis-steps over the summer have left many investors questioning their faith in the infallibility of the mandarins in Beijing.

Meanwhile, the relentless slowdown in the broader Chinese economy that has been under way for the last few years appears to be worsening, and deep-seated problems in the real estate, manufacturing and financial sectors are becoming more acute.

http://www.ft.com/cms/s/2/5bd011ce-78b7-11e5-933d-efcdc3c11c89.html?ftcamp=published_links%2Frss%2Freports_business-china%2Ffeed%2F%2Fprod#axzz3s8uEa1Ay

As usual however the rescue operation initiates after the ship has already capsized. The CCP's economy is already being declared lost at sea.

Xi and Li are presently considering to allow the Maoists' centerpiece of the economy, the state owned and operated corporations, to fail. This however is not a short term or long term reform. Instead of a gradual transition to a more market and consumption based economy, reformers now need to see the basic institution of the SOEs fail outright. Or to threaten it. That the Boyz are willing to risk the attendant political and social unrest shows how backed into a corner they are.

Unrest is the Dictator's number one horror in a country of 1.7 bn people, a hundred million of which will at any time possible throw the bums out.

[Publicus]

The trillion yuan ticking time bomb:

http://www.bloomberg.com/news/articles/2015-11-19/china-has-a-1-2-trillion-ponzi-finance-problem-as-debt-piles-up

The stock market bust over the summer is being felt ever more presently as the linked article basically discusses.

CCP Boyz set out from late last year to create booming equities markets in Shanghani and in the smaller but wealthy market adjacent to Hong Kong, in Shenzhen. SZ is Deng's original Special Economic Zone from 1979 so it's well ahead of other CCP cities, but remains far behind HKG in sophistication. The white line on the roads and surfaces that separates the two marks the delineation between two worlds.

The Boyz' stock market idea was to sell the people on buying stocks. That would fatten the accounts of the corporations to include the unprofitable state owned ones. The corporations would thus have a load of new money to pay off debt.

Stock markets lost 50% in a month and its been bust since. The Boyz went well beyond their Index baseline of 4000 but now, after the sudden shocks, it's back in the low 3000. Investors lost more money value than the GDP of Germany.

The result is the corporations got no new money to begin to pay off some debts. Mr Xi, Mr Li....meet Mr. Ponzi. I think you gentlemen have already heard of each other.

[sandyf]

Its unfortunate that some can only see the trees.

Why we should be thanking China for slowing down