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China’s Economy Grows 6.9%, but Warning Signs Persist
China's GDP growth accelerated slightly to 6.9 percent in the 1st quarter of 2017, after five consecutive quarters of GDP growth at 6.7-6.8%, according to government data. This reflected larger use of steel in the construction industry and more mortgages issued by the state controlled banking sector. Government officials say productivity is improving helping GDP growth, with closing of less efficient manufacturing plants. Industrial production increased 7.6% in March 2017, according to the National Bureau of Statistics. The government is trying to control higher lending and reduce the backlog of bad loans at banks. Higher growth helps to reduce the bad loans at banks from the earlier period after 2008 financial crisis, improving financial stability.
China's stalling economy and productivity growth- the need for new direction in 2013-2015
03/06/2012
Bloomberg estimates show every one dollar of new credit created now yields about 17 cents in GDP growth as old polices of state led growth are no longer working. This compares to over 83 cents in 2007. Financial repression by reducing interest rates for savers is further depressing consumer spending when it is most needed to rebalance the economy towards domestic consumption.
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China’s True Growth Is a Mystery; Economists Weigh the Clues
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Devaluation Hints at China’s Rising Distress Over Economy
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Quarterly GDP growth in China in 2015-2016
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China’s First-Quarter Growth Slowest in Six Years at 7%
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Washington Post 01/27/2016
China’s Economy Grows 6.9%, but Warning Signs Persist
The New York Times 04/17/2017
China's big problem in 2015- 8000 local government financing vehicles running up debt even when about half of borrowing goes to rollover old loans
01/28/2015
As the debt is run up it takes more units of borrowing to create one unit of investment. Over 4 units of borrowing in 2015 compared to less than 2 units of borowing before 2007, is what it now takes to create one unit of investment, according to JP Morgan. Where this adds to the glut in building or if its just a pet project or dream of city mayors the productivity of the investment is much lower, with additional risks in borrowing. And the collateral to support it of land sales is now increasingly unreliable with developers making cuts as property markets are slowing. The central government fearing slowing growth is pushing problems down the road, say experts. The IMF estimates that local government debt will reach 56% of GDP by 2019. The danger is that this will depress China's growth to below 5-6% in coming years witht a lot of the new borrowing simply going to rollover old loans, a situation Japan faced in the 1990's when the expression zombie loans was coined. This has implications for major manufacturing exporters Germany, Japan, the U.S., and for commodity exporters Australia, Canada, Brazil, S. Africa, Chile, which may look to India, Indonesia and other developing countries for exports.
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Debt That Once Boosted Its Cities Now Burdens China
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A Warning on China Seems Prescient
New York Times 08/24/2015
China facing full-blown banking crisis, world's top financial watchdog warns
The Telegraph 09/19/2016
China’s Economy Grows 6.9%, but Warning Signs Persist
The New York Times 04/17/2017
Moody’s Cuts Its China Rating for the First Time Since 1989
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China's Debt crisis
07/29/2010
The debt of local governments estimated at between 27% of GDP by Dragonomics and the China's National Audit Office, to a much larger 42% by Prof. Shih of Northwestern University.
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Asia Goes on a Debt Binge as Much of World Sobers Up
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China's Silver Linings Playbook
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Wall Street Journal 06/25/2013
Central Bankers Hone Tools to Pop Bubbles
Wall Street Journal 07/08/2013
Charlene Chu Is the 'Rock Star' of Chinese Debt Analysis
Wall Street Journal 08/22/2013
Quarterly GDP growth in China in 2017
04/17/2017
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China’s Economy Grows 6.9%, but Warning Signs Persist
The New York Times 04/17/2017
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China's Moment of Truth: Financial Reform or Growth?
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Economist 04/18/2015
China’s True Growth Is a Mystery; Economists Weigh the Clues
Wall Street Journal 04/27/2015
Devaluation Hints at China’s Rising Distress Over Economy
New York Times 08/12/2015
China's GDP
12/19/2014
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China Raises GDP Estimate 3.4%
Wall Street Journal 12/19/2014
China’s True Growth Is a Mystery; Economists Weigh the Clues
Wall Street Journal 04/27/2015
Washington Post 01/27/2016
China’s Economy Grows 6.9%, but Warning Signs Persist
The New York Times 04/17/2017
Moody’s Cuts Its China Rating for the First Time Since 1989
WSJ 05/24/2017
Warnings from the IMF and the Bank for International Settlements in 2016 as China's debt to GDP ratio exceeds 255%
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Grouped Articles
China facing full-blown banking crisis, world's top financial watchdog warns
The Telegraph 09/19/2016
China’s Banks Are Hiding More Than $2 Trillion in Loans
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China’s Economy Grows 6.9%, but Warning Signs Persist
The New York Times 04/17/2017
Moody’s Cuts Its China Rating for the First Time Since 1989
WSJ 05/24/2017
In Downgraded China, Echoes of Japan’s Boom and Bust
WSJ 05/24/2017
Kenneth Rogoff on the financial crisis in China with debt exceeding 270% of GDP, shadow banking, real estate bubble and unsustainable local government finances
08/24/2015
Kenneth Rogoff of Harvard, is an expert on financial and debt crises, with the most extensive quantitative study of debt crises of 66 countries with Carmen Reinhart. The research is published in the book, "This Time Is Different." He discusses the debt crisis in China with the NYT's Andrew Ross Sorkin, saying China is not immune to the problems from an alarming buildup of debt. He says the reason China was seen as impervious to debt problems is because of the high savings rate of 30%, the millions of migrants moving to cities for manufacturing work, and government control of markets. Actually he sees China as a really good example of "This Time Is Different," the notion that somehow it can't happen here. The result is along delay before an event and the sudden speed of the implosion once it hits. The effects Rogoff sees are the risks to commodity producing countries such as Russia, Brazil, and other countries dependent on exports. He says China's large foreign exchange reserves offers a way for it to manage the debt crisis.
Grouped Articles
A Warning on China Seems Prescient
New York Times 08/24/2015
China facing full-blown banking crisis, world's top financial watchdog warns
The Telegraph 09/19/2016
Will Trump herald a US economic boom?
The Guardian 12/07/2016
China’s Economy Grows 6.9%, but Warning Signs Persist
The New York Times 04/17/2017
Moody’s Cuts Its China Rating for the First Time Since 1989
WSJ 05/24/2017
In Downgraded China, Echoes of Japan’s Boom and Bust
WSJ 05/24/2017
Is China's GDP growth for 1st quarter 2015 the 7% official figure, or below 5% as estimated by Capital Economics, Citi and the Conference Board
04/27/2015
Experts say the official numbers for GDP are "fudged" or simply way off. The Bureau of National Statistics does not release the methodology, inflation assumptions and other basis for the GDP figures, making many of the numbers hard to reproduce. Transparency is seriously missing in the figures. As Communist party chief of Liaoning provincee, prime minister Li Keqiang, looked at the GDP numbers with skepticism, considering instead figures on electricity consumption, rail cargo, bank loans, as more reliable indicators of economic activity and growth.
Grouped Articles
China’s True Growth Is a Mystery; Economists Weigh the Clues
Wall Street Journal 04/27/2015
China’s Economy Not Immune to Market Sickness
Wall Street Journal 06/30/2015
For All Its Heft, China’s Economy Is a Black Box
Wall Street Journal 08/25/2015
Washington Post 01/27/2016
China’s Economy Grows 6.9%, but Warning Signs Persist
The New York Times 04/17/2017
Moody’s Cuts Its China Rating for the First Time Since 1989
WSJ 05/24/2017
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