lunes, 10 de junio de 2013

lunes, junio 10, 2013

June 8, 2013

In China, More Signs of Slowing Growth

By KEITH BRADSHER
 

 
HONG KONGAfter weathering the global financial crisis better than any other large economy, China is now showing its own signs of slackening growth despite heavy lending from state-owned banks and extensive government investment programs, data released over the weekend showed.
      
Industrial production fell last month to its lowest growth rate since last September. Imports, mainly materials needed by factories, and fixed-asset investment both fell in May to their weakest growth since last August, when the economy was still mired in a sharp but deep summer slowdown.
      
Producer prices, typically measured at the factory gate, have declined on a year-on-year basis every month for 15 months in a row and have accelerated downward through March, April and now May. Chronic overcapacity has set off price wars even as blue-collar wages continue to rise.
      
The May data ‘'have confirmed that the economy is stuck in stagnant growth again after quite a brief rebound’’ over the winter, said Xianfang Ren, a senior economist in the Beijing office of IHS, a global consulting firm. ‘‘Demand-side indicators are unanimously weak, with extremely weak exports growth and continued slide of fixed-asset investment growth.'’
      
In interviews over the past month, executives in China described being discouraged about overseas demand, although they are not yet nearly as worried as they were at the bottom of the global financial crisis in 2009. Some are also expressing the beginnings of concern about the health of domestic demand.
      
‘'Our export business has come down from last year and is not great, though still at acceptable levels,’’ said Eric Tang, the sales manager for Suqian Green Glove, a manufacturer of vinyl gloves for medical examinations and food processing in Suqian, in east-central China. ‘‘Our domestic business is a small part of our overall activity and is middling along as well.'’
      
A few executives say that they already see considerable distress in their industrial sectors. Zhumadian City Kangmao Arts & Crafts, a 1,500-employee manufacturer of fabric shopping bags and backpacks in central China, has had to cut prices by a fifth in recent months because of lack of demand, particularly from overseas buyers.
      
‘'Our business has dropped greatly since the start of this year,’’ said Wang Xuexin, the vice general manager. ‘‘All expansion plans have been put on holdin fact, we have actually recently closed down part of one factory building already and have cut back the number of our workers since our orders are down by double digits.'’
      
To be sure, there were still a few signs of strength in the Chinese economy. Retail sales were up 12.9 percent in May, marginally better than an increase of 12.8 percent in April. Government spending on new rail lines and other infrastructure has also been strong, even as companies have cut back on manufacturing and real estate investments.
      
Some executives say that their companies are fine, even as they acknowledge broader economic troubles. ‘‘While our factory is doing all right, many of our peers in the industry have had to deal with problems related to overcapacity and falling prices,’’ said Sam Xu, a sales manager at the Yongkang Yongxin Industry & Trade, a maker of physical fitness equipment in Yongkang, in southeastern China.
      
China’s difficulties have global significance because the country has emerged as the world’s largest consumer of many goods, including items like copper, steel, cars and cellphones. Economists from a number of international organizations and banks have been marking down their forecasts for Chinese economic performance this year, predicting growth of about 7.7 percent. That would be a robust pace by most countries’ standards but weak for China, where many businesses and families had become accustomed to double-digit growth over most of the past three decades.
      
Beijing’s official target is 7.5 percent growth this year, but the country has often beaten targets in the past. At the same time, however, Western economists have long accused China of smoothing its data, understating true growth during boom years but also overstating it during downturns.
      
In May, industrial production was up 9.2 percent from the same period a year earlier, slowing a little from the 9.3 percent growth in April. Fixed-asset investment growth has dipped slightly, to 20.4 percent for the first five months of this year, particularly weak given that investment was already fairly slow early last year.
      
Consumer price inflation also faltered in China last month while producer prices at the factory gate fell sharply, the government announced Sunday morning.
      
The price statistics released Sunday morning, followed by the industrial production and fixed-asset investment figures Sunday afternoon, came a day after China released export and import statistics for May that were also considerably weaker than most economists had expected.
      
Exports barely rose in May, up 1 percent from a year earlier. But that anemic result may have reflected a government crackdown on false export reporting by companies that had been seeking to bypass currency controls and move money into the country as a way to place a bet on further appreciation of the renminbi.
      
The consumer price index showed subdued inflation for the goods and services typically purchased by Chinese households, with prices up 2.1 percent from the same period a year earlier — a slower pace than in April, when prices had risen 2.4 percent, and below the 2.5 percent rate that economists had forecast for May.
      
Many factories and other producers actually had to cut prices again last month, as producer prices were down 2.9 percent from the same period a year earlier. Those prices had fallen 2.6 percent in April and 1.9 percent in March, and the steeper May decline is a sign that deflation may be gathering momentum.
      
‘'In the absence of strong stimulus policy, and in an environment of rising disinflationary pressure, we expect growth momentum to remain flat if not weaker in the coming quarters,’’ HSBC economists said in a research note Sunday evening.
      
In many economies, the weak inflation and even deflation now seen in China could be a sign that the central bank should expand the money supply and that the government should spend more, so as to stimulate the economy. But Prime Minister Li Keqiang hinted strongly Saturday that the government was leery of bailing out the economy with either another round of large-scale bank lending or extra government spending.
      
The state-run Xinhua news agency said that during a meeting near Beijing, Mr. Li had told provincial leaders that macroeconomic policy should be kept stable, government spending should be controlled and policy makers should focus instead on regulatory changes. Such changes may improve the efficiency of the economy.
      
China’s state-controlled banking system has lent very aggressively for the past four years, helping the Chinese economy avoid the global economic downturn but also producing sharp annual increases in total debt as a share of economic output. That has made Chinese leaders circumspect of relying on further increases in lending to sustain what had been nearly double-digit economic growth.
      
Mr. Li and President Xi Jinping have been urging economic overhauls this spring. But they face powerful vested interests opposed to specific policy changes, like a breakup of the monopolies and oligopolies of state-owned enterprises in many sectors of the economy.
      
Mr. Xi seems to have given few public hints about his economic policy plans after his meeting with President Obama. According to Xinhua, he told Mr. Obama that the 7.7 percent growth in gross domestic product that China achieved in the first quarter of 2013 was a pace that was ‘‘beneficial to adjusting the economic structure and to improving the quality of and returns from economic growth.'’
‘'We have full confidence that we can maintain sustained and healthy development of the economy over the long term,'’ Mr. Xi said, according to Xinhua.
      
‘'While fully seeing the optimistic prospects for the Chinese economy, we believe that it also faces some risks and challenges. Over all, these risks can be generally held in check. We are taking focused steps to further avert and defuse them.'’
      
It is unusual for China to release a large batch of economic statistics on a Sunday. But Monday, Tuesday and Wednesday are public holidays on the mainland.
      

Hilda Wang contributed reporting.

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