More of the same

MR:

China released several economic data points. China’s economic indicators have been in focus due to concerns about its growth slowing down. The data released today showed that China’s PPI (producer price index) for manufactured goods fell 0.3% month-over-month in June. The PPI was unchanged on a year-over-year basis. The data missed analysts’ expectations. China’s consumer price index rose 2.7% in June.

Julian Evans-Pritchard, a senior China economist at Capital Economics, said, “The bigger picture is inflation, apart from food inflation, is actually pretty weak and with the economy continuing to cool, I think the return to factory-gate deflation is very likely.”

Looking at other economic indicators, China’s car sales fell 9.6% in June. China’s car sales have fallen on a yearly basis for 12 consecutive months. Ford (F) and General Motors (GM) have significant operations in China

The economic data that was released today showed a continued slowdown in the world’s second-largest economy. China’s industrial production rose 5% in May, far below analysts’ expectation of 5.5%. The metric stood at 5.4% in April. China’s industrial production growth rate in May was at its lowest point in 17 years.

China’s May fixed asset investment data was also lower than expected. The data showed fixed asset investment expanding at 5.6% in the first five months of the year compared to 6.1% in the first four months.

As we and others have pointed out many times, fixed asset investment, even though it can make up part of GDP calculations, can be really misleading re growth, if all you’re doing is creating empty cities and the like.

One Response to “More of the same”

  1. feeblemind Says:

    China Auto Sales Spiral Down, But This Time It’s Different: Government Refuses to Bail Them Out with Big-Fat Incentives

    https://wolfstreet.com/2019/07/11/china-auto-sales-spiral-down-but-this-time-its-different-the-government-refuses-to-bail-them-out-with-big-fat-incentives/

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