China's Economy Coming down to Earth: The Economist

choi

BRIEFING China's economy | Coming down to Earth. Chinese growth is losing altitude. Will it be a soft or hard landing?  Economist, Apr 18, 2015.
www.economist.com/news/briefing/ ... g-coming-down-earth

Note:
(1) "WHEN '60 Minutes' * * * visited a new district in the metropolis of Zhengzhou in 2013, it made it the poster-child for China’s property bubble. 'We found what they call a ghost city,' said Lesley Stahl, the host. 'Uninhabited for miles and miles and miles and miles.' Two years on, she would not be able to say the same. * * * The new district (pictured), on the eastern side of Zhengzhou * * * Zhengzhou still has ambitious plans, not least for a massive logistics hub around its airport. * * * Its [Zhengzhou's] maturation signals that the slowing of China’s economy is not a cyclical blip but a structural downshift. * * * Henan and the other inland provinces that have a similar level of income per head have 430m residents, nearly a third of China’s total. If they were a sovereign country, they would form the world’s seventh-biggest economy, ahead of both Brazil and India. The far west is China’s final underdeveloped region but it carries much less weight: it makes up less than a tenth of the national population."

郑州市 郑东新区  Zhengdong New Area
(2) "Xiang Songzuo 向 松祚, chief economist with Agricultural Bank of China, a state-owned lender"
(3) "Storm warning [section heading]  The darkest cloud over China is its property market. Factoring in its impact from steel to furniture, it has powered nearly a fifth of the economy. Now, it is set to subtract from growth. House prices have fallen by 6% over the past year, the steepest drop since records began. It is not the first time that the property market has looked fragile, but [this time it (reason) is different] demand has failed to respond to a series of boosts such as cheaper mortgage rates. This has prompted predictions of a coming crash. * * * The oft-heard idea[, however,]  that China is sitting on mountains of unsold homes is an exaggeration. * * * That China’s property market is not about to collapse under the weight of oversupply is good. The bad news is that its growth is stalling. The housing sector started to take off early this century after the government allowed ownership of private property. Mass migration to cities added to demand; China’s urbanisation rate has more than doubled to 55% today from 26% in 1990.”

(4) "E-House, a property consultancy"

E-House (China) Holdings Ltd  易居中国 (based in Shanghai)
www.ehousechina.com/ny.asp
(5) "Wang Tao 王滔 of UBS 瑞银, a bank"
(6) "The more sedate reality is sinking in. In the south of Henan province, the county of Gushi 河南省信阳市 固始县 had wanted to expand its central city [蓼城街道, capital of Gushi] to reach a population of 1.2m, from 500,000 now. Construction work is feverish. * * * But with housing sales failing to meet expectations, Gushi has lowered its sights. It is aiming instead for a population of 800,000. * * * One way China could rekindle its property market is by using its banks to pump cash into the economy, as it did in 2008 * * * Yet that would be a dreadful mistake. [Debt] Increases of smaller magnitudes were precursors to financial turmoil in Japan in the 1990s and much of the West over the past decade. * * * The financial system is also far more complex than it was in the late 1990s, the last time China had a surge in bad debts. State-owned banks accounted for almost all lending back then. Since the financial crisis their share has fallen to less than two-thirds. Loosely regulated ‘shadow banks’ make up much of the rest. But there is no ironclad law that a big rise in debt must result in crisis. Much depends on how liabilities are managed. China has several advantages. * * * In that respect, China’s debt problem is similar to its property malaise. An acute crisis is unlikely, but the prognosis is still bleak.”

choi

(7) “China’s downturn still has a way to run but such pessimism has consistently been wide of the mark.”
(a) Both “off the mark” and “wide of the mark” (not “off” in the second instance) are phrases.
(b) Raju Varghese, Why Is It ‘Wide *of* the Mark’ Instead of Wide *off* the Mark”?  English Language & Usage. In StackExchange, May 16, 2011
english.stackexchange.com/questions/25542/why-is-it-wide-of-the-mark-instead-of-wide-off-the-mark
(Colin Fine on the same day: " 'Wide of the mark' is an established phrase, using a meaning of 'wide' that is rare today — notably still used in cricket, where a 'wide' is a ball that was bowled outside the permitted target area (the wicket). * * * 'Wide off the mark' is not natural, because the relevant sense of 'wide' is now used only absolutely ('went wide') or construed with 'of.'  OED lists only 'from' as an alternative, and marks it obsolete")
(c)
(i) wide (adj): "straying or deviating from something specified —used with of <the accusation was wide of the truth>"
www.merriam-webster.com/dictionary/wide
(ii) wide:
"[adj] 3.1 Baseball (Of a pitch) outside <the ball was wide of the plate>
3.2 Baseball (Of a throw) to either side of a base  <forced a wide throw to first>
* * *
[adv] 2  Far from a particular point or mark  <a shot that went wide to the right>
* * *
[n] Cricket  A ball that is judged to be too wide of the stumps for the batsman to play, for which an extra is awarded to the batting side"
www.oxforddictionaries.com/us/definition/american_english/wide

choi

8) “Still more important is a change in economic structure. Services took over from industry a couple of years ago as the biggest part of China’s economy, and the gap has widened. Last year services accounted for 48.2% of output; industry’s share was down to 42.6%. Services are more labour-intensive, which brings two benefits. First, China is now able to generate many more jobs at lower levels of growth. Though growth dipped to its slowest in more than two decades last year, China created 13.2m new urban jobs, an all-time high. Second, the strong jobs market has allowed wages to keep on rising at a steady clip, a prerequisite for getting people to consume more.”
(a) 徐博, 2014年城镇新增就业预计超过1300万人. 新华网, Dec 25, 2015.
news.xinhuanet.com/fortune/2014-12/25/c_1113777534.htm
(b) In comparison, Bureau of Labor Statistics (BLS), US Department of Labor, releases monthly data.
(i) "Nonfarm payroll employment is a compiled name for goods, construction and manufacturing companies in the US. It does not include farm workers, private household employees, or non-profit organization employees."  Wikipedia
(ii) Why Does the Federal Reserve Consider Nonfarm Payroll Employment to Be an Important Economic Indicator?  Federal Reserve Bank of San Francisco, June 2004
www.frbsf.org/education/publicat ... -payroll-employment
("The BLS publishes two major monthly employment data series * * * The Household Survey is generated from a survey of about 60,000 households; these data include farm jobs in their employment totals. * * * the nonfarm payroll job series is revised annually and is smoother over time than the household survey; it also is considered to be the more accurate employment indicator. Most analysts believe that payroll jobs more closely reflects labor market conditions. For example, Federal Reserve Chairman Alan Greenspan observed in testimony before the US House of Representatives on February 11, 2004: 'I wish I could say the household survey were the more accurate. Everything we’ve looked at suggests that it’s the payroll data which are the series which you have to follow' ”)
(iii)  Employment, Hours, and Earnings from the Current Employment Statistics survey (National); 1-Month Net Change. ("total nonfarm * * * thousands").
data.bls.gov/timeseries/CES0000000001?output_view=net_1mth
(the entire 2014 generated 3,116,000 nonfarm jobs)

* Change in nonfarm payroll should, theoretically, be larger than 城镇新增就业, because the former includes nonfarm jobs in the countryside.
* Last year was one of the best years in the last decade (likely the best year). US population is about a quarter of China's. So for China to have created 13m 城镇新增就业 in 2014, was that too good to be true?
(iv) The above is CHANGE in nonfarm jobs. What about nonfarm payroll, which means how many Americans hold down nonfarm jobs (in a particular month)?

Employment, Hours, and Earnings from the Current Employment Statistics survey (National); Total nonfarm payroll employment (seasonably adjusted). ("thousand")
data.bls.gov/pdq/SurveyOutputServlet?request_action=wh&graph_name=CE_cesbref1
(in December 2014, nonfarm payroll was 140,592,000)

choi

(9) “The government has also relaxed capital controls. Companies previously needed approval for overseas investments above $100m; late last year the threshold was raised to $1 billion. In recent months, capital outflows have surged. Some say this is because Chinese are losing faith in their country. Regulators are far more sanguine, pointing to it as a sign of a better-balanced economy. The alternative—trapping money in China at artificially low interest rates and encouraging wasteful investment—was bound to be more destructive. * * * Under a revised budget law, all provinces are, for the first time, allowed to issue bonds, albeit subject to central approval. * * * Reforms are themselves generating new risks. A bull run in the stockmarket over the past six months is beginning to resemble the asset bubbles that often arise when countries plunge into financial liberalisation. But keeping the previous economic system in place would be more dangerous. It would make growth faster in the short term but at the cost of ever more debt, heightening the risk of an eventual crash.”