TPA

China's Manufacturing Crisis Deepens

Your analysis of Chinese gloom and doom contrast with other views...

Concerning exports, "While the growth of exports in light manufacturing-includin... toys and textiles-has declined sharply, exports of (high value added) machinery and equipment have continued to grow at a high pace..." - World Bank China December 2008 Quarterly Update

Concerning jobs... you said, "About 39% of China’s GDP is capital spending. That means a huge portion of China’s economy is building new factories, steel mills, mines, etc." - This migrant population can also easily be converted to constructing roads, bridges, etc. hence the government's $600b package.

I live in China and things are definitely slowing significantly with folks racheting down the spending hatches and retail sales probably down ~15-20% across the board here in Shanghai (anecdotal evidence). But then again your typical Chinese also has a ton of savings (~25% of disp incomes is saved according to the IMF) that can hopefully be tapped; personal debt is practically non-existent (with exception of home mortgage); and the govt has shown a willingness to spend their forex (to the tune of 20% of GDP). I have hope that the government will be successful in buying a 7-8% growth rate next year.