China’s Economic Recovery Not Sustainable?

Tuesday, September 1, 2009 15:11
Posted in category Uncategorized

[youtube]http://www.youtube.com/watch?v=NYSFzADSmVw[/youtube]

Andy Xie is a man who has been known to call it how he sees it, and while he had focused more and more vocal on China’s asset bubbles in the last several months, he has also be looking at the overall economy and been pointing out where things could go wrong.

This latest clip included.

For myself, where I think it is worth listening to Xie’s remarks is that everyone I speak to in the “real economy” has very little good to say.  Manufacturers are down, logistics firms are getting pummeled, and firms who used to specialize in pre-M&A due diligence are now seeing a brisk increase in factory closure work… and a quick walk through the malls of Shanghai, Beijing, and HK are an excellent indication that those retail figures are not adding up either.

So, while the numbers look good from a government expediture/ investment perspective., the question remains of whether or not this will lead the economy out of the cycle we are in, and for how long it can sustain it.

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4 Responses to “China’s Economic Recovery Not Sustainable?”

  1. William D Strong III says:

    September 3rd, 2009 at 6:27 am

    America recovers in 2010 , China continues growing

  2. admin says:

    September 3rd, 2009 at 7:06 am

    William.

    What does a US recovery mean? Stops the hemorrhaging and stagnates? Goes back to playing hungry hungry hippo?

    China continues growing is not the question. the question is HOW they are growing. So, in your eyes, how with the growth pattern change from this year when it is full of infrastructure growth? Do you see domestic consumption kicking in?

    R

  3. William D Strong III says:

    September 4th, 2009 at 3:21 am

    yes, domestic consumption will start to kick in soon which
    is good news for the global economy. As for the US recovery
    you will have to wait and see. But mark my words
    things will start to pick up in 2010.

  4. admin says:

    September 4th, 2009 at 3:28 am

    William.

    Mark your words? Hmm.. are you the Fed Chief? Have some inside knowledge?

    PLease – give me a bit more than that to go on…. because China’s domestic consumers are not going to carry this market forward. Yes, they have the well known 40% savings rate, but there are some studies going on right now to show that this 40% amounts to little in real terms… and even if spent.. the GDP would only increase a few percentage points at best.

    So.. where will the recovery come from? An orgy of credit card fueled consumerism?

    R