China's Schrodinger Economy Continues To Contract And Expand At Same Time

Tyler Durden's picture

It's hard to know what the world wants but for sure those looking for massive stimulus-driving intervention by the PBoC will be sadly disappointed by the better-than-expected data out of China. With HSBC's China Flash Manufacturing PMI printing with a ninth month of contraction, at a five-month high, but with the Manufacturing Output index at a nine-month high, it would appear that goal-seeked Goldilocks struck again in the soft-landing being engineered across the Pacific. Converging up towards China's 'real' PMI data at the magic 50-mark, HSBC's Asia Economist suggests (via Markit) that "the earlier easing measures are starting to work." With input and output prices slowing, does this disinflationary move provide more room for easing - given that the headline PMI (which implies slowing demand) is still contractionary (as are critical segments like New Orders and Employment). Market reaction is flatline for now with AUD (and implicitly ES) managing a small bump that has now been retraced.



China Flash Manufacturing PMI Summary

and Production at 9 month highs, New orders still contracting, and Employment contracting at Q1 2009 levels...


If they build it - will anyone come?

Source: Markit Economics

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Vic Vinegar's picture

Sure.  But long-term I'd rather have a Chinese wife than a cracka.

Muppet of the Universe's picture

Is anyone remembering that China jacks up its economic data just like every other government?  Jim Rogers tells us China wins.  Yea they win the LONG game in gold.  But in the coming collapse and stimulous/debt bubble?  Everyone is fuhhhhhhhhh'cked.  I would take the numbers you see coming out of China and shoot several handles lower, and HSBC is prob closer to the truth than their government.  Why do I say this?  B/c they've already lied several times, and they have no reason to stop.

The They's picture

China may win in the long run but the communist party... now THAT'S a different story.  If there's any continuity with the party that Mao founded, it's this: the communist party has always founded the prosperity it created on supressing consumption in order to stimulate production.  Now that trend MUST REVERSE.  In order for that to happen, the communist party bureaucracy must be whiped away.  Only once that happens can China truly become the next world superpower.

Vic Vinegar's picture

Abso-fuking nonsense.  Navel-gaze on this or buy physical.

I guess there is way more physical out there than one imagines.   

Because if enough people actually stood for delivery, we wouldn't have to read this shit, no?

Maybe one day, spacemonkey.  Maybe one day.

Vic Vinegar's picture

Once again junker, you prove commenting on ZH > stamp collecting.

While you have not offered anything of value yet, I'm busy worrying about how quickly that junk came down.

Yet I'm also compassionate enough to wonder if:

-you hold physical

-you wanna hear Katy Perry again (OK - here you go)

What's up?  Why are your panties in a bunch?  LOL

ACP's picture

What's long term nowadays? The bullshit is so thick and widespread nowadays I can't even think about what I'm going to do after I pinch my next loaf.

As for Schrodinger...the cat was simultaneously dead and alive, not just contracting and expanding, which is the perfect description of the Chinese economy. Look at the "remnants" of last Olympics. Holy shit.

sitenine's picture

If they build it - will anyone come?

There are a billion of them.  So, eventually?

China has room to grow, and they are so very good at central planning.

Most of their numbers are lies, but they don't have to depend on those numbers internally.  Do they?  China is Chinese, so one thing we can be sure of is that they wont end like Europe.

Vic Vinegar's picture

China is the new wild west.  I don't pretend to know how 'the elites' there think, but the business workers there are excited about things.  They are looking to make more money and do better for themselves.  They care not about: central banking, the loss of their liberty (they never had any - LOL), or making witty comments on the internet.  

It's an exciting time to be alive in China.  

barliman's picture


In may be an "interesting" time to be alive in China ... in line with the old Chinese proverb.

There are about one billion Chinese people who do NOT find this an exciting time to be alive in China.

They are the ones outside of the 'middle class' and the elites. They are not doing better. They are just being exploited.

Reality is SUCH a bitch, isn't it?


Vic Vinegar's picture

Reality is SUCH a bitch, isn't it?

Not really.  I don't see much of a difference between a Chinese girl making toys today and my grandfather working in the iron ore mines.  Both took the best job they could.

JackT's picture

There are only so many ghost cities that can built.

Vic Vinegar's picture

Lemme guess: you aren't living in China?

adr's picture

Lemme guess: you aren't actually Chinese?

JackT's picture

Nope. Not in China. All I'm saying is that The Chinese govt can't feed it's people nor its pig stock with concrete. You will see what I mean once the US harvests come in and exports drop. China is playing the same game as everyone else, except they are stuck between a rock, a wall, and a hard place.

thefedisscam's picture

Vast majority of American MORONS like you have NO clue how Chinese live, yet you think you know everything. What a pity.

Feel sorry for your guys!

chump666's picture

and...USD bids are in outta china again for the nth time

*USD/CNY floats to the top of the trading band after 2nd day of weak fix

FieldingMellish's picture

It's OK as long as they don't eat the cat (assuming its dead).

Number 156's picture

I'll bite.

Its Dead cat quantum entanglement. One detector registers a bounce, the other a thud. I can assure you that both cats are dead.

Anusocracy's picture

So China's economy is functioning like a leaky heart valve?

youngman's picture

They just put a 15.5 billion offer for Canada´s biggest oil company.......buying up those commodities..its better than treasuries..

JustObserving's picture

They are paying a nice 61% premium for the privilege.  They should be buying up some gold and silver miners - they are dirt cheap now.  

jonjon831983's picture

NXY isn't Canada's biggest oil company.  Most of its production comes from outside of Canada.  Anyways, apparently it was run quite badly, their stock price has been getting nailed and production was getting lower past few quarters.  Good riddance.



Sry, using wiki:

Comes in 10th based on market cap (well from that list maybe scratch ENB+TRP, so 8th.


But yes, once again another way to dump USDs.

jimmyjames's picture

But yes, once again another way to dump USDs.


Not necessarily-

Canada also runs a trade deficit with China-so maybe it's the CAD that's being thrown back at us instead of buying paper bonds-


China is one of Canada’s largest and fastest-growing trading partners in the world. In 2009, bilateral merchandise trade with China totalled $50.8 billion, consisting of $11.2 billion in Canadian exports to, and $39.6 billion in imports from, China.

barliman's picture


The Chinese have a very poor track record of central planning. They HAVE had a long run of capital expansion thanks to Western corporate investment, both direct (i.e. actual capital) and indirect (e.g. intellectual property - both provided and stolen) which has served as a basis for their expansion over the last thirty years.

Unfortunately, their capital expansion has been surpassed by the capital extraction by the elites.

Produce any numbers by anyone regarding China - absent the virtually impossible reform of their system by the Chinese elites, it won't make any difference.

China has been trapped on its current path for the past decade. Somewhere down the road is masive social and political upheaval accompanied by economic collapse.

Anyone think there will an upside when it happens?


Vic Vinegar's picture

I greened you because it's a genuine comment.

But on a long enough timeline...they make things so money flows there.  I wouldn't be too concerned about hypothetical econcomic collapses.  

barliman's picture


Lots of poeple in lot of places over centuries have made things.

ALL of them have experienced econonomic collapses when there have been discontinuities created in the markets.

Either you have not studied anything in socioeconomics (the last two centuries of America's economic contractions and expansions would be a start) or you are intentionally engaging in misinformation.


Vic Vinegar's picture

No I am not intentionally engaging in misinformation.

Rather I am intentionally engaging in...

...Katy Perry videos, as they seem to be superior to anything written per the comments section on this site in days.  Here is a good one, just for you.

Also, I am engaging in a suggestion that all space monkeys buy physical.

If you can one-up me - please do!

barliman's picture


Well, I like Katy Perry so I gave you an uptick for the concept and the link.

I don't know if this is a one up ... because it could be under your buy physical heading ...

Buy bulk quantitites of the foods you eat, at least a year's worth, and learn canning before you buy any precious metals.

It will cost less in the long run, you are going to need to eat if you are not dead, and, under many circumstances, it will be far more valauble than silver or gold.

There is virtually no down side risk to this investment strategy.


Vic Vinegar's picture

Just wanted to take back my green.  Canned foods taste like shit.  

Not to mention there ain't cats out there with naked shorts on Chef Boyardee.  Yet for some reason they continue to crush the price of physical silver.  Why do you think that is?

Buy physical.  Or listen to this lunatic.  LOL 

Vic Vinegar's picture

Wow.  Three junks to zero..I guess there are some passionate Chef Boyardee fans who read ZH.  

Buy physical and you don't have to put up with this bullshit any longer.  Seriously.

On the other hand, if you enjoy this nonsense...

CrazyCooter's picture

So, what happend to the old school "I love the smell of napalm in the morning" recruitment videos? A fucking break up so lets join? Seriously?

So, the armed forces are better off with emitionally unstable people, unprepared to do the job (i.e. kill people, blow shit up, or support those who kill people and blow shit up)?

If you are not sure you are "prepared" visit your library for this book:

I don't mean to be an ass, I am just saying this feel good music video bullshit join the millitary because I cut my hair crap is worthless. Hopefully, at least one tree huggin hippie, with long hair, a bad boy friend, and shitty self esteem, will spare their future (and that of the service who would be stuck with them), by doing the math on actually joining a force that exists, well, to kill people.

We need men (women), who love the smell of napalm to defend freedom.



P.S. Disclaimer: Read "War is a Racket" by Smedley Butler. Also, I am not MDB, but take my post with a bit of sarasm. It is, as I understand it, the most effective criticism. Thus was my intent.

P.S.S. For those true valor warriors out there, Dave Grossman is your google objective.

Vic Vinegar's picture

Already read War is a Racket buddy.  I find you to be a good commenter but your thoughts worthless.

Your thoughts shared here are different than a spacemonkey's thoughts on Yahoo re: The Dark Knight Rises how?

Buy physcial.

Anyone who cares should be pushing that concept on sites outside of our comfort zone.  Until then, let the mental masturbation continue...

TheFourthStooge-ing's picture

barliman said:

China has been trapped on its current path for the past decade. Somewhere down the road is masive social and political upheaval accompanied by economic collapse.

Anyone think there will an upside when it happens?

Layoffs for AnAnonymous and his peers at the Ministry of Truth.

barliman's picture

AnAnonymous and his peers at the Ministry of Truth being 'terminated' by their bosses for 'message failure' would be more in line with precedent.

The 100 million plus deaths from starvation seem like too steep a price to pay.


YouAreBliss's picture

Ben says his 5 year plan beats theirs, so we win.

What's his 5yr plan?  Make China buy our T - Bills with huge negative real yields, until the dollar collapses.  

zorba THE GREEK's picture

China has its own currency and central bank like the UK and the U.S. and

Japan, so they can BS, print, lie, cheat, and steal from their people, just

like the UK, U.S. and Japan. They can kick the can for years before their

house of cards fall. Problem solved.


Duke of Con Dao's picture

stranger than fiction, Tyler, I actually wrote a produced libretto based on a month of Schrodinger's life

when he ran off with his mistress to the Austrian Alps where he finished his seminal work but

finally gave up and went back to his overbearing wife who looked like Krushchev. It had touches

of the Blue Angel... that said here's my current vid: 

YouTube - "Howard Roark, You Didn't Build That!" says President Obama

adr's picture

What else do you expect, reality contracting but official numbers expanding. The goal is for reality to become irrelevant, replaced by government manufactured propaganda engineered to increase the value of paper held by the unproductive leech class.

Just like the miracle of US corporate revenues that continue to climb in an environment of declinin sales. Really?

A corporation can produce nothing, yet be valued more than half the goods producing sector alone. Business is built for the explicit purpose of an IPO, to generate income for underwriters and wealth for angel investors. The inventory held is a scam to create the illusion of growth. Masive multi-million dollar debts are created to manipulate reality to make a worthless corpoation look like a genious of enterprise. Blowing $250 million to make a lump of shit look like a diamond is peanuts when an IPO can generate bilions. Dollar one in real profit never needs to be made in order for the executives to cash out to the tune of millions.

This is capitalism? This is the production of goods to serve the demand of the consumer? The consumer doesn't even exist. He is told what to purchase, what to consume, and what to watch by the massive corproations because his choice has been removed. Tell me the alternative to the multibillion dollar copration is in the marketplace? Tell me how a single person with a dream can, in today's over regulated world, create a productive corporation to unseat a behemoth.

If you do become lucky enough to make some money, the lawyers will target you for extinction. You will be told, "You made your money, be happy. It's our turn now and you should have know better." New corporations that aren't on the IPO path, cherry picked by the investment banks have no chance. They on average last 3-4 years before they are destroyed by "market forces".

For example Skull Candy, and ShockDoctor were all garbage corporations making terrible products that found friends in high places. There was no real consumer demand for their products. However, they made perfect stock scams. They were given the IPO path and corporate retail boards forced buyers to purchase massive inventory loads to show huge revenue growth. In less than a year a company that had less than 20 units of inventory was given 1200 units taking up half a store gondola? It made no sense, until the IPO was filed.

The big box retail model isn't failing because of a lack of consumers. It is failing because the investment banks are moving on to scams that don't require the production of product inventory. Dotcom 2.0 allows for a corporation without revenue to be worth billions. If you are worth billions without even needing to sell a product to a consumer, what the hell do you need them for? It's Wall Street Utopia! We played this game before and it didn't turn out so well.

Vic Vinegar's picture


Buy physical metals while you can.  And if you see your neighbor carrying something, help him with his load.

cinefex3d's picture