China's "New Normal" Means Slower Growth, President Warns

Tyler Durden's picture


"If everyone in society is trying to get into the financing business, we may have entered a phase where a fever has started to affect our ability to think," warns one analyst of the bubble-fervor in China... but President Xi Jinping dashed the hopes of stimulus-hunters everywhere (once again) last night amid a slowdown that analysts forecast will lead to the weakest expansion since 1990. As Bloomberg reports, Xi said there will be no major stimulus and commented that "[Chinese] must boost [their] confidence, adapt to the new normal condition based on the characteristics of China’s economic growth in the current phase and stay cool-minded." In other words, keep calm and carry on (oh and don't lever any more carry trades please!).


As Bloomberg reports,

China’s growth fundamentals haven’t changed and the country is still in a “significant period of strategic opportunity,” Xi said, according to a Xinhua News Agency report on the central government website on May 10. At the same time, the government must prevent risks and take “timely countermeasures to reduce potential negative effects,” he said.


“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,” he said.

But it is clear that those hoping for a financial-crisis-style massive stimulus will be left wanting...

Xi’s comment showed that the Chinese government is reluctant to roll out large stimulus now,” said Xu Gao, chief economist with Everbright Securities Co. in Beijing




“Xi is in line with what the Chinese government has been saying in the last couple of months, that a stimulus-driven rebound won’t be sustainable,” Everbright’s Xu said. “On the other hand, there are few details from Xi about what the ‘new normal’ is.”


Premier Li said in April the government won’t adopt “short-term and strong stimulus policies in response to temporary fluctuations in the economy.

But remains strident in his efforts to control the shadow-banking system...

Shadow finance creates a “gambling” mindset, with funds channeled into short-term investments where returns are more lucrative, Liu said at a conference in Beijing on May 10.




“If everyone in society is trying to get into the financing business, we may have entered a phase where a fever has started to affect our ability to think,” Liu said, “We must make up our minds to rectify interbank operations and all kinds of wealth management products.”

Two words - "priced in"?

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Mon, 05/12/2014 - 09:31 | 4750476 LawsofPhysics
LawsofPhysics's picture

Yes, slowly buying gold and just about every other real physical asset on the planet.  The Chinese are about employing more Chinese, even in America.  Tao is about many things, patience is certainly one of central principles...

Mon, 05/12/2014 - 09:40 | 4750496 Winston Churchill
Winston Churchill's picture

1600 tonnes of gold a year is hardly slow LoP.
And that is the buys we know about.

Mon, 05/12/2014 - 09:41 | 4750500 old naughty
old naughty's picture

oh, there are others:

buys of Russian oil and gas, and invest "not limited" in Russia.

Too bad, amrka.

Mon, 05/12/2014 - 09:48 | 4750520 GetZeeGold
GetZeeGold's picture



China is gonna be top dog this year.....cause our leaders are such visionaries.

Mon, 05/12/2014 - 09:43 | 4750502 LawsofPhysics
LawsofPhysics's picture

Yes, and buying real estate hand over fist in western Canada and western 'merica.  They are also buying commodities like mad. They really don't care if copper and iron ore "lose value" on paper.  They know that when fraud is the status quo, possession is the only thing that matters.

How's your Mandarin?

The E.U., 'merica, and Russia want to destroy each other?  China is "the dude", they will abide.

Mon, 05/12/2014 - 09:44 | 4750508 Sudden Debt
Sudden Debt's picture

the Chinese talk in numbers.

So when they rule America, a romantic night will sound like this:

Oh baby... let's go upstairs and do a 69, 52 and a 101... me so horny...

Mon, 05/12/2014 - 09:47 | 4750515 Winston Churchill
Winston Churchill's picture

Only ever learnt the swears, and curse words.
My Farsi and Russian were good,but use it or lose it, and
I haven't.Too old a dog now.

Mon, 05/12/2014 - 09:49 | 4750527 nasdaq99
nasdaq99's picture

sending copper up 7c!!!

Mon, 05/12/2014 - 09:32 | 4750478 SoilMyselfRotten
SoilMyselfRotten's picture

US New normal:No growth, masquerading as bad weather

Mon, 05/12/2014 - 11:20 | 4750854 prains
prains's picture

.......masquerading as failed attempts to start WWoar 3.0

Mon, 05/12/2014 - 09:36 | 4750488 Charles Nelson ...
Charles Nelson Reilly's picture

question: do the chinese not smile in photos like american blacks?  I've never quite understood why that is?

Mon, 05/12/2014 - 09:37 | 4750491 FieldingMellish
FieldingMellish's picture

I didn't know Jackie Chan ran China?

Mon, 05/12/2014 - 09:39 | 4750499 STG5IVE
STG5IVE's picture
Russia: Historic 30-yr gas deal with China set to be signed next week
Mon, 05/12/2014 - 09:42 | 4750501 yogibear
yogibear's picture

"Tao is about many things, patience is certainly one of central principles."

The fact that China took well over 1,000 years to build the Great Wall is a testiment for their determination and patience.

The US is a flash in the pan compared to China.

Mon, 05/12/2014 - 09:42 | 4750505 Sudden Debt
Sudden Debt's picture

No stimulus? WOW! That guy sounds like a capitalist!!!!

Mon, 05/12/2014 - 10:31 | 4750652 Relentless101
Relentless101's picture

Crazy that in the world we live in, it take bigger balls to not print money. Just fucking strange to me.

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