Xi: China must get used to "new normal" of slower growth


Chinese President Xi Jinping has said his country needs to get used to slower growth as the government carries out reform.

"We must boost our confidence, adapt to the new normal condition based on the characteristics of China's economic growth in the current phase and stay cool-minded," Xi said.

However, the government must also prevent risks and take "timely countermeasures to reduce potential negative effects," he said.

Xi's comments follow data that indicate slowing growth and falling inflation.

The remarks are also the latest from a senior figure - including from Xi himself - that China must tolerate more moderate growth; to lower those "potential negative effects," the government has announced mini-stimulus measures.

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Comments (11)
  • Shaduc
    , contributor
    Comments (2948) | Send Message
     
    http://bit.ly/1iFBRZT

     

    The statistics showed that the number of permanent residents in Shanghai was 23.8 million, with the city seeing a net inflow of 9.535 million people as of the end of 2013.

     

    Beijing came second with a permanent resident population of 20.7 million, and a net inflow of 7.718 million people.

     

    Guangdong, a leading province in the manufacturing sector, was still a major net inflow province, with the southern cities of Shenzhen, Dongguan and Guangzhou luring 7.555 million, 6.431 million and 4.615 million people, respectively.

     

    But Chongqing, which reported a population of 33.43 million, proved to be the least attractive, with an outflow of 3.984 million people.

     

    A report by Peking University found that urban new migrants became the nucleus of urban development, earning an average of 3,033 yuan (US$487) a month.

     

    The urban migrants also had a deeper understanding of their own status and hoped to improve their lives by working in these bigger cities.
    11 May 2014, 09:49 AM Reply Like
  • Pompano Frog
    , contributor
    Comments (1904) | Send Message
     
    Thanks for the new website. I am doing a lot of work trying to develop good models for China financial variables.

     

    I have to laugh when I see these headlines and the reader might not understand they are talking about economic growth of 7.5%.

     

    The Chinese government is enormously sophisticated. I think they are managing analyst expectations just as a U.S. high tech company does. I will be shocked if they don't keep the growth at 7.5% especially given the low inflation numbers which frees the Central Bank from any restrictions.

     

    As you may know, there is no housing bubble in China. Most of these articles are written by political scientists, history and journalism majors who see China's government, which is delivering a rising standard of living to all of its citizens, as an enormous intellectual threat.
    11 May 2014, 03:19 PM Reply Like
  • Chucky C
    , contributor
    Comments (10) | Send Message
     
    >>As you may know, there is no housing bubble in China.

     

    Are you serious? Anyone who knows a bit about China and has visited China in the last couple of years MUST have noticed the many empty high risers and house blocks, some developments are like ghost towns that can be seen in places like Spain.

     

    Those in the know have sold half of their stakes in housing (in stead of owning 5+ properties they average own about 2-3 now). Only good neighborhoods in the 1st tier cities are holding their value this year. I except a price drop of another 20% in the second tier cities over next 18 months or so.
    13 May 2014, 09:07 AM Reply Like
  • Shaduc
    , contributor
    Comments (2948) | Send Message
     
    The Pastor at my Shanghai church plans to retire in 20 years in the countryside.

     

    That is who is buying the empty high rises!
    13 May 2014, 09:11 AM Reply Like
  • Pompano Frog
    , contributor
    Comments (1904) | Send Message
     
    Chucky..

     

    When you have an economy of 1.3 bil people growing at 7.5% per year and weak retail sales defined as 11.9% versus a year ago you need to build infrastructure and make investments ahead of demand.

     

    It can't be done otherwise. You are repeating the economic rattlings of the Western academic community. The average Chinese developer has a profit margin near 20% plus he pays corporate taxes and a land appreciation tax. All together it means that a 20% discount is a breakeven number in the worst case scenario.

     

    The government controls the level of new construction because they control the level of land sales. They control the price of new construction because they control the price of the land sales. The price of real estate in China equals U.S. pricing because the Chinese government is intentionally creating that scenario.

     

    Real estate bears a strong relationship to GDP as does a stock market. In real estate appreciation it is the land price movement that accounts for most of the movement in price. The government by controlling the level and price of land sales takes that land profit for itself and reinvests it in infrastructure spending.

     

    Singapore has a similar system. The government itself sees no need to explain their policies even to their own population.

     

    There was an opportunity in the U.S. in 2009 to make a great investment move, but Seeking Alpha readers chose to focus on bank lending and the unemployment rate.

     

    China equities are going to explode upward soon. FCA (20.97) S&P (1899) because valuations are 9x, which is similar to the U.S. bottom in March, 2009. And, the China Central Bank has unlimited funds at its disposal and is more efficient in deploying those funds because they work in concert with the rest of the government.

     

    I need to do some work.
    13 May 2014, 11:13 AM Reply Like
  • Chucky C
    , contributor
    Comments (10) | Send Message
     
    Pompano, your rationale is valid but do check the current stats. The government are doing their best to control ownership level, land sales and interest rates but some measure comes way too late in order to induce an orderly exit for the current overcapacity. I have some direct contact in real estate development in various 1st and 2nd tier cities and some are facing a very hard time now.

     

    >>Singapore has a similar system. The government itself sees no need to explain their policies even to their own population.
    So has Hong Kong. It is simple not comparable as in both cases, policies are were drafted in early stages and enforced more rigorously in a much smaller and hence controllable scale.

     

    >>China equities are going to explode upward soon.
    People have been saying that for years and SHCOMP has been stagnant in the last couple of years whilst other stock market almost doubled. Some sectors that convince me are e.g. internet/mobile and gaming in China.
    14 May 2014, 05:33 PM Reply Like
  • minecanary
    , contributor
    Comments (1234) | Send Message
     
    We'll see what happens when 300 million new home owners find out they are 80% underwater. It'll be worse then saying the Obamaphones are going away...
    11 May 2014, 02:07 PM Reply Like
  • Robin Hewitt
    , contributor
    Comments (5473) | Send Message
     
    There are no Obamaphones and never were except in some imaginary world that never existed. So what happens when that goes away? We know the answer to this already...the crazies get even crazier!
    12 May 2014, 11:19 AM Reply Like
  • minecanary
    , contributor
    Comments (1234) | Send Message
     
    Here in Ct.we get ads for them all the time. Get any gov't assistance through one of the 900 programs and you can get a free phone and 200 minutes a month...in case you need to call 911 or accept that job offer. It's federally funded so I'm sure it's available in every blue state.
    14 May 2014, 09:40 AM Reply Like
  • Robin Hewitt
    , contributor
    Comments (5473) | Send Message
     
    Check snopes: http://bit.ly/UpP0Lx This is not something Obama set up.
    14 May 2014, 10:27 AM Reply Like
  • BISTRO_CFO
    , contributor
    Comments (195) | Send Message
     
    It'll be worse then saying the Bushphones and Reaganphones are going away... LOL!
    12 May 2014, 12:56 AM Reply Like
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