Has China"s Robust Economic Growth Come to an End? No, But There Is No New Beginning Either
Some people say they cannot believe China's growth is slowing down, others cannot understand how it kept going at 10% year-over-year for nearly three decades and even with the Global Economic slowdown posted 7-8% growth.
Well, consider this; maybe those numbers were inflated, after all the Chinese state-controlled media puts a positive spin on everything and our news simply repeats what they report.
Sometimes you have to peak over the Great Wall to see the truth.
I am just saying.
Interestingly enough, there was an interesting article on December 19, 2014 titled; "Slower Growth, More Volatility and Other Predictions For China In 2015," by Gordon Orr on LinkedIn, but should any of us be surprised? No, and let me explain why.
You see, we should expect slower growth as a percentage, merely because China's economy has grown (purported 10% year-over-year for decades) which statistically is impossible to continue.
Now it seems much of that previous growth was falsified and/or built on shaky foundations (municipal lending pyramid schemes).
China has the capacity to manufacture 5-times what the world consumes, but there are not 5-times the buyers on a finite planet, even if global growth is 3% (+ or -) that kind of capacity isn't needed.
So, if China is betting on robust growth of that type, they are headed for a cliff, imagine what that does to the rebalancing of global trade as it happens? So, what's in store for China in 2015? Well, some financial reckoning I suppose and some shell-game shuffling, but less than in the past, as the Western World is onto that.
And we see their Internet stocks screaming past all-time record-breaking IPOs, but let's not forget our own Dot Com Bubble and crash, is history going to repeat in China - most likely I'd say but not anytime soon, probably not in 2015.
I'd look at other sectors for fall-out however - real Estate, Resources, materials and some domestic inflation too.
Is this to be a soft-landing that everyone is busy talking about? Well, definitely some sector rotation, but no one can prop up a house of cards forever no matter how many Communist Chinese Leaders, regardless of their lack of attire (emperor wearing no clothes joke), declare it so, or how many times it is shown on the state-controlled media stations or written about in the newspapers or censored online news.
See that point? And, I am glad you do.
Please consider all this and think on it in 2015.
Well, consider this; maybe those numbers were inflated, after all the Chinese state-controlled media puts a positive spin on everything and our news simply repeats what they report.
Sometimes you have to peak over the Great Wall to see the truth.
I am just saying.
Interestingly enough, there was an interesting article on December 19, 2014 titled; "Slower Growth, More Volatility and Other Predictions For China In 2015," by Gordon Orr on LinkedIn, but should any of us be surprised? No, and let me explain why.
You see, we should expect slower growth as a percentage, merely because China's economy has grown (purported 10% year-over-year for decades) which statistically is impossible to continue.
Now it seems much of that previous growth was falsified and/or built on shaky foundations (municipal lending pyramid schemes).
China has the capacity to manufacture 5-times what the world consumes, but there are not 5-times the buyers on a finite planet, even if global growth is 3% (+ or -) that kind of capacity isn't needed.
So, if China is betting on robust growth of that type, they are headed for a cliff, imagine what that does to the rebalancing of global trade as it happens? So, what's in store for China in 2015? Well, some financial reckoning I suppose and some shell-game shuffling, but less than in the past, as the Western World is onto that.
And we see their Internet stocks screaming past all-time record-breaking IPOs, but let's not forget our own Dot Com Bubble and crash, is history going to repeat in China - most likely I'd say but not anytime soon, probably not in 2015.
I'd look at other sectors for fall-out however - real Estate, Resources, materials and some domestic inflation too.
Is this to be a soft-landing that everyone is busy talking about? Well, definitely some sector rotation, but no one can prop up a house of cards forever no matter how many Communist Chinese Leaders, regardless of their lack of attire (emperor wearing no clothes joke), declare it so, or how many times it is shown on the state-controlled media stations or written about in the newspapers or censored online news.
See that point? And, I am glad you do.
Please consider all this and think on it in 2015.
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