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China's February services PMI slides to 48.4 from 52.9 previously, reports the CFLP, attributing...

China's February services PMI slides to 48.4 from 52.9 previously, reports the CFLP, attributing the fall to the business lull following January's Spring Festival holidays. The sub-index of new orders fell to 46.1 from 48.5.
Comments (25)
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    Interesting, apparently the Chinese New Year's parties must have produced one hell of a hangover if the effects have lasted this long. I wonder what the hell they were drinking?

     

    QE1 or QE2?
    4 Mar 2012, 11:19 AM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    http://bit.ly/AiZ2f8

     

    "China cuts GDP growth to 7.5 pct in 2012"

     

    BEIJING, March 5 (Xinhua) -- China sets its GDP growth target at 7.5 percent this year, down from 8 percent in 2011, according to a government work report to be delivered by Premier Wen Jiabao at the parliament's annual session Monday.

     

    This is the first time for the Chinese government to lower its economic growth target after keeping it around 8 percent for seven consecutive years."
    4 Mar 2012, 09:52 PM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    http://bloom.bg/xI4fV7

     

    "China Auto Sales Seen to Have Worst Start in Seven Years as Economy Cools
    By Bloomberg News - Mar 5, 2012
    Automobile sales in China, the world’s biggest car market, may be having their worst start in seven years as a slowing economy and record gasoline prices keep consumers away from dealerships."
    5 Mar 2012, 08:30 AM Reply Like
  • bbro
    , contributor
    Comments (9746) | Send Message
     
    Western investors have a very poor understanding of seasonal patterns in China...
    4 Mar 2012, 11:56 AM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    Bbro,

     

    "Western investors", what does that have to do with it?

     

    The manufacturing PMI is hovering in contraction territory as well and if you use HSBC's flash PMI it has been in contraction for 4 months so the above seems to reflect what is going on in the country. Obviously they are not going into recession, they are going below trend growth which may mean a 7% GDP growth which for the Chinese would be close to a hard-landing relative to expectations.

     

    The above report is seasonally adjusted and an official report so maybe you can explain to me why I should ignore it or somehow reinterpret it with a non "Western" mindset. How would I do that?

     

    If I am missing something important, I would really appreciate having my misconceptions corrected. Thank you.
    4 Mar 2012, 12:15 PM Reply Like
  • Tack
    , contributor
    Comments (13426) | Send Message
     
    CW:

     

    Instead of getting frantic about the SA headline, read the entire news release, then tell me the general situation is negative.

     

    http://bit.ly/xA3w8t
    4 Mar 2012, 12:40 PM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    "The non-manufacturing sector's Purchasing Managers Index (PMI), a key economic indicator, fell to 48.4 percent last month from 52.9 percent in January, the CFLP said.
    A PMI reading above 50 percent indicates expansion from the previous month, while a reading below 50 indicates contraction"
    4 Mar 2012, 05:17 PM Reply Like
  • Tack
    , contributor
    Comments (13426) | Send Message
     
    CW:

     

    Like I said, read beyond one paragraph:

     

    "The data came after China's manufacturing PMI saw its third consecutive month of growth in February, rising to 51 percent on increased new orders and export demand..."

     

    "The business outlook index saw a rise of 3.3 percentage points to reach 66.5 percent..."

     

    "The construction industry rebounded significantly from January. The sector's business activity index rose to 53.7 percent, while its new orders index increased to 49.5 percent..."

     

    "The construction industry's business outlook index ran up to 74 percent, a sign of market optimism despite slowing investmens, the CFLP said, adding that March's data will give a better picture of the overall economic climate..."

     

    "The property industry also experienced a rally, with its business activity index climbing 7.8 percentage points to 45.9 percent. The index for new orders rose 4.8 percentage points to 40.5 percent..."
    4 Mar 2012, 05:52 PM Reply Like
  • Papaswamp
    , contributor
    Comments (2198) | Send Message
     
    Construction in China is heavily govt funded. These projects are to keep the masses busy and a result of actual demand. This is made obvious by the continued contraction in property values.
    http://bloom.bg/zqm4RI
    4 Mar 2012, 05:57 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    Papa, Chinese lend to developers who lose. Just like the US an other countries and as Wen Jiabao has said over an over. He doesn't care if a few hundred developers lose there shirts. Thats business !

     

    They'll forclose and sell to the next dufuss. Maybe even foreign buyers.
    4 Mar 2012, 06:02 PM Reply Like
  • DaleW
    , contributor
    Comments (67) | Send Message
     
    The Chinese have been cashing in their USD's before it loses more value. Also, its easy to throw a party paid by interest of US Treasuries bought years ago at 3.5%, now down to 2 %. It a hell of a problem to tame growth when receive billions on your investments.
    4 Mar 2012, 12:03 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    DaleW, the Chinese have been brilliant bond traders as the sold all the short term stuff over a year back and did ride the long term up as you point out. Now their dumping that and gobbling up US mortgage paper...... They will literally own us !
    4 Mar 2012, 12:10 PM Reply Like
  • Tack
    , contributor
    Comments (13426) | Send Message
     
    Da:

     

    No, they will own lots of paper. The Japanese owned lots of paper, too, back in the '80's. Last time I looked, all the real estate is still right here, and now mostly not owned by those same Japanese.

     

    P.S. How was it so brilliant to sell all the U.S. short-term paper a year back, when in the last year in increased in price by over 30%?
    4 Mar 2012, 12:35 PM Reply Like
  • Trader14
    , contributor
    Comments (224) | Send Message
     
    Short term treasuries are up less then 1% over past year, It's the long bond that's up almost 30%, which was his point, maybe check your data before adding your next post script.
    4 Mar 2012, 02:32 PM Reply Like
  • Tack
    , contributor
    Comments (13426) | Send Message
     
    Trader:

     

    Maybe, the discrepancy lies in duration were considering.

     

    In any event I stand corrected in two respects: 1) I overestimated the price escalation associated with 10-yr Treasuries interest-rate erosion, and 2) I suppose one would consider 10-year intermediate or long term, not short.
    4 Mar 2012, 02:52 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    Hi tack, this is POK. You have to know they loaded up on huge amounts of hard commidities with that money from those short paper sales and that rose quite abit.

     

    Yes, the Japnese own paper,but, the Chinese are grabbing US non Gov paper an US stocks in mega amount and also,so are a bunch of EU banks in on the US mortgage game now..

     

    US banks are shell shocked and there getting beat to the punch.
    4 Mar 2012, 05:01 PM Reply Like
  • Trader14
    , contributor
    Comments (224) | Send Message
     
    I understand I thought your post was fine just that the postscript was unnecessary especially with the rather amazing outperformance of the longer bond versus the short term bond over a time when stock market kept pushing higher. Interesting times for sure.
    4 Mar 2012, 11:27 PM Reply Like
  • DaleW
    , contributor
    Comments (67) | Send Message
     
    C-hinese
    A-sset
    S-ecured by
    H-ome
    4 Mar 2012, 12:34 PM Reply Like
  • Ananthan Thangavel
    , contributor
    Comments (836) | Send Message
     
    If going below 7% growth is a hard landing for China (and I am not disputing it is) that is a truly extraordinary situation. How many countries on earth have been able to sustain growth at that pace with no recessions? Zero. It's not a question of if China is going to have a hard landing, it is a question of when. And when it comes, it will be worse than 2008, because policy makers do not have a single tool left in their toolbox.
    4 Mar 2012, 12:36 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9955) | Send Message
     
    AT,
    So what is your forecast for when the hard landing in China will happen?? Thanks for any information on this.
    5 Mar 2012, 03:23 AM Reply Like
  • mike mohr
    , contributor
    Comments (451) | Send Message
     
    While U.S. in depression Chinese export oriented economy does not stand a chance. China is a nation of savers their growth depends on U.S. and Western European consumers.
    4 Mar 2012, 12:47 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    mm, China knows that and that is why their sticking to the 5 year master plan to grow their domestic market. Also, why they do nothing to fight the 15% wage inflation. They only fight the headline goods an service #.

     

    They will be fine....... Many belittled the US double dip,but, if China closes ranks the EU recession will drag the US into a dipsy doo.. Oil price will help.

     

    I was worried with the high yielding reits with Ben saying no mass,but, he may be back in a quarter an tout a more negative QEish tone.
    4 Mar 2012, 05:23 PM Reply Like
  • the_value_vulture
    , contributor
    Comments (198) | Send Message
     
    I cannot wait until the market tries to spin this one into something positive. They'll probably headline that manufacturing PMI rose for a third consecutive month and bury the rest.
    4 Mar 2012, 02:04 PM Reply Like
  • Julius Ferraro
    , contributor
    Comments (495) | Send Message
     
    People on SA are already giving it a go at turning it into a positive.
    4 Mar 2012, 02:33 PM Reply Like
  • Venerability
    , contributor
    Comments (3048) | Send Message
     
    Of course, it's positive!

     

    Chinese tightening was one of the major drags on world markets last year.

     

    China loosens, even a little, world markets do better.

     

    And while manufacturing is more important to China, Inc., services is important to the exponentionally growing Chinese bourgeosie.

     

    China feels it can stimulate further - albeit not by the West's standards yet - as inflation is perceived to be less of a problem.
    4 Mar 2012, 04:02 PM Reply Like
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