Showing posts with label growth. Show all posts
Showing posts with label growth. Show all posts

Wednesday, January 04, 2017

China´s economy does well on a micro-level - Jeffrey Towson

Jeffrey Towson
China´s macro economy regularly triggers off predictions of doom and gloom, but at micro level, there is still an amazing opportunity for growth, says Peking University business professor Jeffrey Towson to the Financial Times. “You can keep watching more and more movies and taking more and more vacations."

The Financial Times:
China’s economy has risen to become the world’s second-largest without the existence of entire industries, most of them in the service sector and leisure, which are taken for granted elsewhere. From private aviation to yacht-building, industries are emerging that will help offset the decline of coal, steel and other sectors emblematic of China’s “old economy”. 
Jeffrey Towson, a business professor at Peking University and a former investment executive at the Saudi Arabia-basedKingdom Holding Company, argues that it is easy to be “too pessimistic” about the Chinese economy. “Looking at macro stuff in China does that to people,” he says. “Things are much more optimistic at a micro level.” 
Mr Towson points to “unlimited demand” for everything from entertainment to healthcare, which are growing at double-digit rates and will continue to do so for the foreseeable future... 
“You can keep watching more and more movies and taking more and more vacations,” Mr Towson says. “That is different from buying a washing machine or a sofa. People don’t buy five washing machines.”
More in the Financial Times.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.

Wednesday, May 25, 2016

Measuring China´s growth - Paul French

Paul French
Paul French
Experts use different measurements to gauge China´s economic growth, as the official GDP figure is often seen with suspicion. But other measurements like electricity usage and railway transportation also have their limitations, warns China veteran Paul French in Splash 24/7

Paul French:
There are explanations for the poorer metrics of electricity consumption and rail freight movements (both of which are generally reliable numbers) – the slowdown in construction has a significant knock-on as regards power consumption and rail transport. Back in the mid-2000s construction and heavy industry drove electricity use growth and both of these are in retreat at the moment. Similarly steel production declined 2% last year as construction slumped. With so much continued talk of ‘ghost cities’ this is not necessarily a bad thing and should (and is) stimulating the property market as supply currently matches demand to a greater degree than any time in the last decade. 
For those that watch transportation metrics closely it should be noted that while rail freight is down, road transportation is booming. Highways now carry 79% of total freight now, up from 72% in 2006, and highway traffic rose 6% last year. Quite simply rail freight movements are no longer the key indicator they once were. Road freight movement is harder to quantify as it involves vast numbers of small trucking operators, but still it is growing. Traditionally 50% of rail freight cargoes have been coal and the decline in heavy industry as well as the rise in non-coal fired generators means a decline in that key sector. 
So, in conclusion, what can we say of the Chinese economy in the first half of 2016? Stable growth seems a fair analysis though, looking to the rest of the year, a pick up in non-consumer sectors hasn’t occurred as many thought and that could mean a drag on growth and, a major concern for the party state, a rise in unemployment. This could mean a meagre 4% growth for 2016 even with rising consumer spending. This may give succour to the China bears to some degree, but it certainly doesn’t indicate a collapse scenario that some have been predicting.
More at Splash 24/7.

Paul French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more financial experts at the China Speakers Bureau? Do check out this list.  

Friday, May 13, 2016

Is China heading for lower growth? - Sara Hsu

Sara Hsu
Sara Hsu
An anonymous top-official suggested that China´s economy was heading for L-growth, jargon very few looked into says financial analyst Sara Hsu in the Diplomat. She suggests L-growth might even imply a lower growth than currently implied.

Sara Hsu:
Recently, in the People’s Daily an unidentified “authoritative figure” discussed China’s likely growth trend, referring to it as an “L-shaped trend.” Observers have assumed that the “authoritative figure” is a top official who cannot be named. The official emphasized that in the first quarter of the year, conditions have stabilized and reform has continued, but that reliance on credit has been excessive. While this article has been reported extensively in both the Chinese and Western media, there has been little discussion of what L-shaped growth is, and what is means for China. 
L-shaped growth means that after the market or economy bottoms out, comprising the vertical part of the L, the economy then takes on a very slow recovery, comprising the horizontal part of the L. This would imply that the “New Normal” signifies even slower growth than expected, especially in a recovery after notable real estate and stock market asset price declines have taken place. A V-shaped growth curve would mean that after the economy reaches its lowest point, recovery takes hold and climbs rapidly. This is certainly not what is happening, as China struggles to spur growth in new sectors.
More in the Diplomat.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more financial analysts at the China Speakers Bureau? Do check out this list.  

Tuesday, January 12, 2016

Maintaining high growth just not an option - Victor Shih

victor shih
Victor Shih
The ´New Normal´ it is called, the lower (but still considerable) economic growth China is displaying. High growth is over, says political analyst Victor Shih in the Hellenic Shipping News. Maintaining high growth is just too expensive, he argues.

The Hellenic Shipping News:
“The era of easy growth is over,” said Victor Shih, professor at the University of California-San Diego. “It’s increasingly about difficult choices.”... 
With global demand slipping and fewer Chinese entering the workforce, Beijing will need to resort to stimulus spending to get there, analysts said, delaying the reckoning with restructuring. 
“It’s very costly and inefficient to reach these growth targets,” Mr. Shih said. “The political leaders want all these good outcomes, growth, some degree of reform and a high degree of stability,” without recognizing the tough trade-offs these entail, he said. 
One such trade-off is that between pollution and growth. By letting steel and other heavy industries in northern Hebei province ramp up to meet their year-end production targets last year, the government left the capital bathed in toxic pollution, angering the city’s residents, according to Mr. Shih. If Beijing shutters them, growth will fall, leading to more unemployment, which is another potential source of unrest. 
Among the most nettlesome issues is what to do about the state companies that dominate heavy industry and strategic sectors of the economy and wield great political influence.
More in the Hellenic Shipping News.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more political experts at the China Speakers Bureau? Do check out this list.