How bad will it get in China?

[dex]

Bloomberg.com: Worldwide

China’s electricity output declined 7.8 percent in November from a year earlier and fell 3 percent in October, the first declines since February 2002, according to China Economic Information Net data compiled by Bloomberg. Manufacturing shrank for a third month as the deepening global recession cut demand for the nation’s toys, clothes and electronics.
Edwards said rising unemployment among factory workers will fuel social unrest, threatening the Communist Party’s survival and increasing the risk authorities will devalue the yuan to boost exports.

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No matter how bad we think we have it economically in the USA it is usually worse outside the USA.
Before this downturn China needed to create about 20 Million jobs a year to maintain it's unempolyment rate - unofficially in the high teens.


Protectionism was the problem in the 30s. Maybe currency devaluation will be the problem today.

 

[NW-Bound]

Is it really so dire? Just a day or two earlier, I saw on Bloomberg Web site the report that China GDP growth slowed down to 6.8% annual rate in the last quarter. That would be hypergrowth for developed countries. If I can find the article, I will post the link.

 

[Zoocat]

From Roubini 1/22/09
RGE - The Chinese Devil Wears Prada: Why 0% Growth is the New Size 6.8%

"The Chinese came out today with their 6.8% estimate of Q4 2008 growth. China publishes its quarterly GDP figure on a year over year basis, differently from the U.S. and most other countries that publish their GDP growth figure on a quarter on quarter annualized seasonally adjusted (SAAR) basis.
When growth is slowing down sharply the Chinese way to measure GDP is highly misleading as quarter on quarter growth may be negative while the year over year figure is positive and high because of the momentum of the previous quarters’ positive growth.
Indeed if one were to convert the 6.8% y-o-y figure in the more standard quarter over quarter annualized figure Chinese growth in Q4 would be close to zero if not negative.
Other data confirm that China was in a borderline recession in Q4 and that it may be in an outright recession in Q1: production of electricity plunged 7.9% in y-o-y basis; the Chinese PMI has been below 50 and close to 40 for five months now.
And with manufacturing being about 40% of GDP , manufacturing is certainly in a sharp recession (negative growth) and the overall economy may be close to a recession
So the 6.8% growth was actually a 0% growth – or possibly negative growth – in Q4; and the Q1 figures look even worse. So China is in a recession regardless of what the highly massaged official numbers claim."

 

[NW-Bound]

Oldbabe, you are right. Their economy was flat from Q3 to Q4. Here's another article on the same subject.

Global meltdown snares China - MSN Money

The natural question is whether they have reached bottom. I have read that some pundits are now placing their bets on China being able to climb out of the hole before other nations. I hope they are right since I have some positions on raw material producers, and some dry bulk shippers. I have no Chinese stocks, but follow their market indices for a feel of their economy. Their market is closed for several days as they celebrate the Lunar New Year.