Further signs that the Chinese economy is in the throes of a serious downturn. From Bloomberg:
China’s exports shrank last month and industrial-production growth cooled, Fan Gang, an adviser to the People’s Bank of China, said today.
“Things are not so good,” Fan said at a forum in Beijing. “November figures will come out soon, and industrial growth will be something around 5 percent and export growth will be negative.”
A collapse from October’s 19.2 percent export growth would add pressure on policy makers meeting in Beijing this week to do more to sustain the expansion of the world’s fourth-biggest economy…..
“It doesn’t really matter what China does to try to revive exports, they are going to be bad for the foreseeable future,” said Paul Cavey, an economist with Macquarie Securities in Hong Kong. “The key now is what can be done to boost domestic demand.”…
Chinese leaders, meeting for three days to set economic policy, may cut personal income tax to help boost consumption, according to Kevin Lai, senior economist at Daiwa Institute of Research in Hong Kong.
Industrial-output growth of 5 percent would be the weakest since Bloomberg data began in 1999 and worse than the 7.2 percent median estimate of 14 economists in a Bloomberg News survey. Production rose 8.2 percent in October…
China needs to prepare for a “worst case scenario” as the global slump deepens, Central bank Governor Zhou Xiaochuan said Dec. 4. Exporters of toys, clothes and furniture are cutting production or closing down, triggering a surge in labor disputes and increasing the risk of social unrest in the world’s most populous nation.
Labor disputes almost doubled in the first 10 months of this year as businesses closed and some owners fled, the official China Daily newspaper reported Dec. 5. …
The yuan’s biggest one-day decline in three years on Dec. 1 also has prompted speculation that China may allow its currency to depreciate, helping exporters by making their products cheaper in overseas markets.
The yuan may weaken as much as 10 percent against the dollar, Morgan Stanley said last week. In contrast, Commerce Minister Chen Deming said that the nation won’t rely on currency depreciation to help exporters who are suffering because of shrinking demand.
China should stick to a “gradual” approach on the currency and policy makers shouldn’t bow to pressure for a sharp fall in the yuan, central bank adviser Fan said today. He is the only academic member of the bank’s monetary-policy committee.