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The Elephant Dragon In The Room: China's Hard Landing, In 21 Charts
Back in September, before the crude crash started in earnest driven far more by the relentless Chinese - and global - economic slowdown than anything OPEC may or may not have done (and whose output, as a reminder, hasn't changed in years and actually declined, indicating the plunge is demand not supply driven) we showed, with the help of a few clear charts, that China is gripped by the worst commodity, and economic, crash in ages.
Today we update where China stands on its path to a very hard landing. As the charts below show, what has been so far a controlled descent is rapidly sliding out of control as the elephant-dragon in the room can no longer be ignored.
China's NBS manufacturing PMI at 50.1 in December, down from 50.3 in November, the lowest in one and a half years.
Industrial production (IP) growth declined to 7.2% yoy in November from 7.7% yoy in October. Growth in power production decelerated to 0.6% yoy in November from 1.9% in October.
Output growth of electricity, steel, cement and oil refining fell to 0.6%, 1.2%, -4.0% and 5.5% respectively from 1.9%, 2.0%, -1.1% and 6.3% in October.
Headline year-to-date FAI growth ticked down to 15.8% yoy in November from 15.9% yoy in October, in line with consensus. Real ytd FAI growth could have edged down to 15.3% yoy in November from 15.4% yoy in October. On a monthly basis, nominal FAI growth increased to 14.9% yoy in November from 14.4% yoy in October.
Investment growth of local projects (88% of total FAI) was 16.2% yoy in November, unchanged from September. Investment growth of central government projects dropped to -11.0% yoy in November from 0.2% yoy in October.
Real estate FAI growth edged down to 10.5% yoy in November from 10.9% yoy in October.
Retail sales growth quickened to 11.7% yoy in November from 11.5% in October. In real terms, it accelerated to 11.2% from 10.8%. It was buoyed by surging sales during the Single Day (11 November).
Growth in total auto sales in volume dropped to 2.3% in November from 2.8% in October. Growth in passenger cars fell to 4.7% in November from 6.4% in October.
CPI and PPI inflation slowed o 1.4% and -2.7% yoy in Nov from 1.6% and -2.2% in Oct. Both CPI and PPI inflations surprised on the downside.
In mom terms (not seasonally adjusted), food prices decreased by -0.4% in November as the warmerthan- usual weather ensured ample supply of vegetables and fruits.
Otstanding Total Social Financing edged down to 15.3% in November from 15.4% in October (read: "China's Shadow Banking Grinds To A Halt As Bad Debt Surges Most In A Decade")
November export growth came in below expectations at 4.7% vs. 11.6% in October (market consensus 8.0%). Import growth surprised on the downside at -6.7% from 4.6% in October and (market consensus 3.8%).
Growth in processing imports, a leading indicator of processing exports, declined to 3.9% yoy in November from 24.0% in October. Low-value-added processing exports plummeted to 1.6% yoy from 9.1% in October.
In November, new export orders dropped further to 48.4 from 49.9, likely showing the impact of CNY appreciation in NEER terms in 2014. In the meantime, monthly export growth dropped to 4.7% from 11.6% in October.
Export growth to the US declined sharply to 2.6% yoy in November from 10.9% yoy in October, while export growth to Japan improved to - 5.8% yoy in November from - 8.1% in October. Export growth to the EU was largely unchanged at 4.1% yoy in November. Export growth to ASEAN slowed to 14.6% yoy in November from 18.0% in October.
Growth in imports from ASEAN declined to -8.2% in November from 24.5% in October. Meanwhile, import growth from EU dropped to -6.8% from 10.4% yoy in October.
In volume terms, growth in iron ore, copper and crude oil imports slumped to -13.4%, - 3.6% and 7.9% yoy in November from 17.0%, -2.4% and 18.0% yoy, respectively, in October. In value terms, growth in iron ore, copper and crude oil imports dropped to -46.2%, - 9.8% and -10.9% yoy in November from -24.7%, - 5.6% and 3.8% in October, respectively.
In yoy terms, the number of cities that saw new home prices down/flat/up changed to 68/0/2 in November, compared to 67/0/3 in October. Prices of new commodity residential properties for 70 medium-to-large-sized cities surveyed by the National Bureau of Statistics (NBS) declined by 0.59% mom in November, versus 0.83% in October.
On the demand side, the yoy growth in new home sales in floor space terms and value terms slumped to -13.3% and -7.9% yoy in November from - 3.4% and -3.1% yoy, respectively, in October.
New home starts growth plummeted to -33.8% yoy in November from 38.6% yoy in October. The volatility in the yoy growth rates of new starts was partly due to big swings in the data last year. Growth in residential property investment dropped to 5.5% in November from 9.5% yoy in October.
Credit conditions for property developers worsened in November. Growth in domestic loans, a main source of funding for property development, declined to -10.6% yoy in November from 3.3% yoy in October. Meanwhile, growth in pre-sale proceeds dropped to -20.3% yoy in November from -12.1% yoy in October partly due to deceleration in home sales growth.
And the punchline chart: the Shanghai Composite over the past 12 months.
Source: BofA, Bloomberg
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Noting but smoke and mirrors! The numbers that USA greets as great success for it are called as hard landing for China!
Elephant Dragons are cool.
Independence from insane people is cooler.
RIPS
China will survive, the USA won't. That is all that matters.
I agree, their economy is much more diversified.
China is giant commie ponzi. Worst than the US. What the hell are you two talking about?
Well China at least produce something other than un-repayable debt.
They're a partial ponzi while the entire US is a ponzi. They produce tangible assets and goods while we produce debt and selfies/tweets.
China will probably see a failure of the communist party followed by turmoil and possible break up into separate political units by region. That's how they have done collapse for their entire history, just look up the dynastic cycle. The United States will either break apart in similar fashion or become an even more totalitarian, isolated state.
For the people who entertain some bizarre fantasy about Russia or China becoming our benevolent overlords...I hope you get exactly what you wish for, although I doubt you possess the mental acuity to appreciate the irony if such a situation were to develop.
Try your best to remember that geopolitics is not football, there are real consequences to this stuff. The quality of life for you and your family may change dramatically for the worse if you remain dependent upon the fantasy that some other country is going to step in and make things all better. If you want positive change then you'll have to find ways to do it yourself. Things suck right now, but you're in denial if you think they will be better under another country's yoke.
Feeding their population is China's weak card. America has huge agriculture excess capacity.
We can make a guess about how much the FED is lying to us. With China, they could be in full collapse ans still claim a 7% growth rate and the only way we'll know is by the riots.
There are more riot in the US then in China.
Just don't be on the Wong side of that trade.
China is a net creditor. It will suffer the coming global deflationary crash but not nearly so much as the U.S. and Europe which are deeply in debt. Swap deals with Russia, Brazil, Venezuela, Argentina and others will soften the economic blows. It will also make them anxious and leary of antagonistic US diplomacy...
http://www.globaldeflationnews.com/negative-social-mood-causes-geopoliti...
http://www.globaldeflationnews.com/china-to-the-rescue-russia-agrees-to-...
It might also make them Anxious, Aggressive, impatient Landlords demanding more Assets & Collateral.
we'll see
But china still a mercantile economy ... and needs exports for job growth
a few years ago when Hu was president said china needed to create ~ 15 million new jobs a year to keep up with population growth
and without social safety net ... civil unrest never far away
China will print the yuan to create a consumer base to replace the US consumers. It will be the end of the US overnight.
Russia crashing, China crashing, Belarus crashing... so much for them.
You fail at Troll.
freedom123= MPNET faggot.
Seems like you keep crashing also. On this site. Daily.
Why bother? Masochistic or getting paid?
Hald randing.
However China A50 20th Nov 7356.7 today 11866.4 !!!!!!!!!!!!!!!!!!!!!!
http://uk.investing.com/indices/ftse-china-a50-advanced-chart
20,000 Ebola cases later…
wow, coming down from 15% to merely 12% growth rates is very VERY HARD
iirc, the current '5 year plan' GDP growth numbers are +7.5%
of course, there is some doubt on the reliability of chinese govt numbers
IF they would just include drugs and hookers into those numbers, their GDP would rise as much as America's economy!
Where did you get 12% from? Even their inflated numbers show 7%. That's with trillions in zombie companies and banks being kept afloat by the PBOC.
Well we had the ascent of the dragon now its time for the descent of the dragon.
News:
- Smart money pouring into Shenzhen as city becomes hotbed of innovation
- Tencent ready to launch China's first private internet bank, WeBank
- Chips down for Macau casinos with first decline in gaming revenue in more than a decade
- Senior Chinese diplomat Zhang Kunsheng sacked for corruption: foreign ministry
- China's box office ticket sales up by a third
2 Jan 2015 - 6:05pm
- More pain expected for China’s oil sector
- Kaisa woes deepen after HSBC loan default
- Chinese factories face bleak outlook
-Top Chinese property developers tipped to extend lead amid market slump
- Around the nation: Restaurant owner fined after fake wine leaves diners ill and in poor spirits
- Around the nation: irate shopper sets mall ablaze
- With Xi Jinping’s anti-graft push the new normal, state firms are safest bets
- La Perla’s Chiara Scaglia gears up for deeper China push with new HK store
-Hong Kong home prices hit record, outlook cloudy pending rate rise
The canary in the coalmine is Macau. The Asians are avid gamblers. If they're not gambling, it means they don't have money.
usd strength
+
yuan peg to usd
=
deep doo-doo
can't wait till china devalues ... and see what happens to that VERY crowded (usdjpy 200) trade ...
got popcorn?
yes on popcorn. west world is in max debt to stimulate/consum with limits of 500 percent/gdp limits-zirp induced (old max was 350%).
china 10x 'd to create max, max plus overcapacity fueled by max, max plus debt.
doesn't end well with commodity price dropping first as indicator of desparation to sevice debt at any cost. kamakazie economics, that cb'rs/zirp/keynsian econ vodo/dodo.
see great post by stockman, recently...
WTF is an "Elephant Dragon"?
Eleph-I-Know...
you mean Elephino? That's a Rhino/ Elephant hybrid.....like a Liger.
How many articles have been written, by how many bloggers, economists, professors and assorted 'analysts', since 2009, indicating an imminent 'hard landing' for China...?
indeed. if you look at charts and ignore texts, it looks like the natural slowdown of a maturing economy. not that there won't be any pain associated with just simply landing...but hard landing? like most countries, their RE bubbel will lead to turmoil...but they'll have manufacturing to pull them out of it. what gets the rest of us out of our real estate buble pop?
How many blogs were around in 2004-2006 about the imminent hard RE landing? Give it time. All those ghost cities and factories were built with debt. Tens of millions of people are needed to buy $200,000 condos. The average annual wage is $6,800. All those factories were built to sell junk to broke Westerners. If the US/EU go into a deep recession, China will follow. There's no way out of it.
https://www.rutherford.org/publications_resources/john_whiteheads_commen...
JPM advertisement. Deposit $999,999 for min. 5 years and receive your brandnew BMW 116 at checkout.
Key-Money is what it is called in Asia I think (limited experience here).
You give Key-Money and you get your money back, all of it, and get to use the Apartment for 2 years or whatever the terms are. I'm not sure if the state is paying the Juice on this... must be or it would be risky... but you could stay in the apartment till you get the money back I guess.
So same thing with a BWM. You get your Deposit back plus the Vig. That is the way it is supposed to work.
Stupid fucking Ameircans & Europeans... they give their deposits to the US Treasuries for free.
Why does it look to me as if it's stabilising rather than "hard landing"?
Because, you haven't paid stock earning taxes on free money equity income.
See lots of Wedges in these charts, and a few with wedges show a cliff dive now...so that may be the way it breaks. Down.
2015 White Elephant Sale.
http://m.youtube.com/watch?v=QPWZZ4QaSQ0&desktop_uri=%2Fwatch%3Fv%3DQPWZ...
Ho Lee Fook - Sum Ting Wong!
So, this is all hard to understand? Millions of brain-dead Americans taught debt is good and a bridge to fun. They went out and borrowed from the bankers and lenders who laughed and got even richer. The fools bought Chinese-made crap with MasterCard and bought what they didn’t need and couldn’t afford. They partied with Fed support. They watched their 401Ks soar with Fed money creation and knew stocks could only go up.
Then one day they found they were all broke and buried in debt. The Fed only bails out the wealthy, they soon discovered. The found their low-paying jobs at Mc’Ds wouldn’t support their lifestyle. The repo man went to work and away went the nice new SUV and 4x4 truck.
Now China has run out of debt-ridden Americans to sell too. Will the Fed throw more money from helicopters? Another, and then another government debt-driven stimulus program? Jawboning, then direct intervention in the markets if it really gets ugly? We shall soon see.
What the hell is the author talking about? I don't see any hard landings in any of those charts. Nothing is cliff-diving. Only a few of those stats are even negative. Enough overblown panicky nonsense on ZH. Pleeeeeze.
dis chinese shiiiiiiiiithole is gonna bloooooooOOOooooooooow !
wat does that elephant dragon have to say " FUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU "
China doesn't break until everyone they sell to breaks first.
Is this bullish for the Western stock markets, I get confused these days!
"Everythings bullish, however bad, they just keep pumping"
"Okay, thanks"
Rook out berow Yankee dogs!
The Chinese need to take a page from our playbook on how to manipulate numbers to present a rosy picture.
I thought they were good at fudging numbers, but apparently the US has them beat at it....
perhaps the exports by destination drop is highest to Japan because it includes outsourced components in manufacturing and Japan is slowing down even faster
So a country that produces stuff for the whole world is in for a hard landing. Imagine the hard landing for a country that produces virtually NOTHING but fiat money?
NOTHING? You overlooked the crystal meth boom.
USA #1 producer of selfies, tweets, and debt. Fuck Yeah!
I recognize the last chart. That's a money-printing chart.
"Growth engines" seem to be dropping like flies.
We just had Christmas. Poundland was full to the brim of plastic Chinese stuff made for the event. Perhaps they could extend further by back to back, celebrating Chanukah, Kwanzaa, Yule, Winter Solstice, Eid, Bodhi Day and The Feast of Trumpets or The Day of Atonement might be worth considering from the Bible. New tax year starts in April so happy holidays to all who celebrate.
Wait a mo, all this happens anyway and still the graphs are down.
The NTSB is gathering a list of names to confirm for the media now. And will be released once the initial crash investigation is complete
get to work Mr. Bullard!