Economic Slowdown in ENTIRE China--Not Just Coasts but Inland Too

choi

(1) Keith Bradsher, China Output Slows Sharply; Ripples Feared; A deep downturn that stretches far into China's Interior. New York Times, May 25, 2012 (front page).
http://www.nytimes.com/2012/05/2 ... s-turning-cold.html

Quote:

"The most striking feature of the slowdown is that it extends beyond the coastal provinces, which depend on exports and are closely linked to the global economy, to the country’s far more insular interior, including cities like Xi’an here in northwestern China.

"China’s economy was 8.1 percent larger in the first quarter of this year than a year earlier, but virtually all of that growth took place last year. The economy barely grew in the first quarter compared with the fourth quarter of 2011, and the second quarter of this year is likely to show even less growth from the preceding quarter, said Diana Choyleva, a China economist in the Hong Kong office of Lombard Street Research.

"Benefiting from heavy government spending on highways and other infrastructure and voracious demand for apartments as poor laborers arrived from the countryside, China’s inland cities had continued to expand even when the rest of the world’s economy fell into serious difficulty in late 2008 and early 2009. But now the economic troubles are evident here in Xi’an

My comment: The first sentence of quotation 2 means that 1Q12 was 8.1% higher than 1Q11 in terms of GDP, but most of that growth happened LAST YEAR, as opposed to in 1Q12. that was why GDP growth in 1Q12 was de minimus when compared with that of 4Q11, or quarter-on-quarter.


(2) Didi Kirstein Tatlow, As China Marches Ahead, Is It On Solid Ground?  International Heralf Tribune, May 25, 2012.
http://rendezvous.blogs.nytimes. ... it-on-solid-ground/

Quote:

"In a provocative essay in Foreign Policy magazine [Everything You Think You Know About the Collapse of the Soviet Union Is Wrong. June 20, 2011] last year, Leon Aron of the American Enterprise Institute argued that the Soviet Union, contrary to popular wisdom, didn’t fall because it was economically weakened, despite its profound challenges in that realm. Nor was the Soviets’ war in Afghanistan the death knell * * * In fact, Mr. Aron argued, the Soviet Union fell because it was morally and culturally weakened.

"Xi Jinping, the man tapped to become China’s next president, will also be a fifth-generation leader. So far, no one has made a convincing argument that Mr Xi is a reformer like Mr Gorbachev. Yet many Chinese acknowledge that systemic lie-telling of the kind that prevailed in the Soviet Union exists here, too.

Note:
(a) The report cites
Wu Jing, China's Young, Burly Shipyards Sinking Fast; An industry that expanded rapidly along the Yangtze River encounters rough going as orders plummet. Caixin,May 10, 2012.
(b) YE Xiaogang 叶 小纲


(3) My comment: It is unclear, in part due to opaque nature of China, what causes China's slowdown this time around--and the remedies. So it is worthwhile to take the slowdown in perspective. The followong is a book review and interview with the book author. The thesis of the book, according to various reviews, seems to me trite, but in view of latest worsening of China's economy, maybe we should take a glance at the book, and how it applies to China.

Fareed Zakaria, China's Economic Crisis, Washington Post, May 23, 2012 (column)
www.washingtonpost.com/opinions/ ... QAB9zclU_story.html
(book review on Ruchir Sharma, Breakout Nation; In pursuit of next economic miracles. Norton, April 2012)

Quote:

"Ruchir Sharma * * * makes a different and more persuasive case in his new book, 'Breakout Nations,' pointing not to China’s failures but to its successes  

"China’s growth looks remarkable. But it isn’t unprecedented. Japan, South Korea and Taiwan all grew close to 9 percent annually for about two decades and then started to slow. * * * What caused these slowdowns? Success.

"All the factors that pushed China forward have begun to wither. [For example] China became an urbanized country last year, with a majority of its people living in cities.