Date: 05-26-12 02:58
China's economy suffers 'sharp slowdown'
By KEITH BRADSHER
The New York Times
updated 5/25/2012 4:23:24 AM ET
Chinafs 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.
The World Bank also warned on Wednesday of a slowdown.
gClearly the economy is much, much weaker than most people thought until recently,h Ms. Choyleva said. gThey have a real mess on their hands.h
China's economic slowdown: hopefully a blessing in disguise
In addition to the above gloomy sentiment, a report on China's own CCTV had reported the consumption of copper has dropped some 20% or more. One Chinese copper company reported shipment dropping some 50%. This is a very serious leading indicator of further economic slowdown in the coming months and years.
I had warned many times that China's economy is excessively dependent on exports. I had warned that as soon as importing countries maxed out their cash then China's export business will crash. The importing countries had crashed in 2008 and 2009. Since then China had propped up its economy by pumping money into the housing industry and created a dangerous bubble in the process. The government has done the right thing to stop the bubble by imposing price control as I had suggested. But while it stopped the housing bubble from increasing to catastrophic proportions like in Japan and the US, it has slowed down China's economy because it was excessively dependent on exports and now has no domestic development plan to replace exports or the slowing housing market.
To some extent the project to built tens of millions of low cost housing over the next 5 years will moderate the slowdown. But by itself it is still not enough. And the government's unwise decision to increase wages of workers by mandate has created excessive inflation which helps nobody while hurting those who are the poorest. I had predicted this dangerous situation in my article "The Face of Chinafs Economic Engine" at the following link:
http://www.network54.com/Forum/238054/t ... mic+Engine.
Unfortunately, the CCP government under the Dengist clique is simply too incompetent to handle this dangerous situation. But the most dangerous aspect of all is the obsession of the Dengists with exports being dominated and controlled by the compradors and luo3 guan1's (¯. Foreign enemies such as the US and Japan will also not allow China to develop an independent domestic economy that is not controlled by them. Therefore, to expect the Dengists to implement enlightened policies to develop and independently expand China's domestic economy is like expecting cavemen to build modern skyscrapers or a group of slaves to build an independent business beyond the control and scrutiny of their masters. The only hope now is that the Chinese people themselves can somehow circumvent the suppressions and stupid policies of the Chinese government and outside the influence and control of foreigners and develop and expand China's domestic economy to provide goods and services for themselves to consume. Maybe in the end this is a blessing in disguise as it push China away from exports and set it finally on the path of sustainable development of China's own domestic economy. And in the process the compradors would lose their dominance of the Chinese economy and be shut out. At the same time the foreigners can finally be frozen out of China's domestic economy. Most important of all, the Chinese people can finally stop supporting the traitorous of "opening up" to foreigners which is nothing more a thinly disguise sell out of China to its formers enemies who are still positioning themselves to dominate, control, colonize, and suppress China.