China Says "Remain Calm" Over Missed GDP Target: Growth "Only" 6.5%

China "only" had 6.5% growth, missing targets. I wonder if growth is really closer to 3%

The Wall Street Journal reports China Growth Slows to 6.5%; Finance Officials Try to Soothe Worried Investors.

China’s economic expansion slowed to its weakest pace since the financial crisis, as top financial regulators launched an extraordinary coordinated effort to calm jittery investors.

The rate of growth in the third quarter dropped to 6.5%, falling short of market expectations, official statistics released Friday showed. Growth in industrial output and consumption weakened in the quarter, while exports held up despite the country’s bruising trade fight with the U.S.

Shortly before the data was released, People’s Bank of China Gov. Yi Gang, banking and insurance regulatory chief Guo Shuqing and top securities cop Liu Shiyu all issued statements urging investors to remain calm. Mr. Guo said recent “abnormal fluctuations” in Chinese stock markets don’t reflect the country’s economic fundamentals and “stable financial system.”

Ignore Abnormal Fluctuations

It seems there have been "abnormal fluctuations" since mid-2015. Then again, were the abnormal fluctuations to the upside or lower?

The other remaining issue is whether or not China really has 6.5% growth as reported.

Trifecta in Play

6.5% GDP?

I suggest "take the under", way under. The State-Owned-Enterprise (SOE) earnings are all a mirage. The tide is going out.

By the way, expect similar action in US equities because they are equally overvalued.

Mike "Mish" Shedlock/

Comments (11)
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Realist
Realist

Kid horn; everyone loses in a trade war. China and the US are both losing something in this trade war.

Mish: I don’t know if China’s growth is 6.5% statistically or much less than that as you imply. All I know is that every time I’m in China there are 100 construction cranes in every major city, bridges and highways being built at breakneck speed, and construction happening everywhere. They are expanding their high speed rail lines and hydro electric generation as fast as they can. Young Chinese are upwardly mobile and tech savvy. Everyone uses their phones to pay for purchases. The stores are packed and the streets are bustling. I have never seen a hint of malaise in their economy. I realize my evidence is anecdotal but it still appears to me that China is continuing to grow rapidly.

HMK and Schaap; your references to Japan are somewhat relevant, but trying to compare 1980s Japan and today’s China is is mostly apples vs oranges. As far as China’s economy “imploding”, anything is possible, but I wouldn’t expect that anytime soon.

Advancingtime
Advancingtime

Like other countries, much of China's growth over the last decade has been constructed upon easy credit and debt. Many people simply do not understand the illusion that has been created as China over-invested and mis-invested following the crisis of 2008. The fact is China will find it impossible to sell people from undeveloped countries that live in a one room dirt floor shanty anywhere near the amount of goods Americans consume.

We must watch the action of the PBOC and what is happening to the Chinese currency in order to understand the impact China is about to exert on markets across the globe. The fact that the PBOC is already scurrying about in an attempt to mitigate damage flowing from the Trump administration is in some ways proof of China's vulnerabilities. The article below goes into more detail.