Well China’s economic growth did slow in the September quarter, but not too many commentators thought fit to mention a major contributing factor besides the slowing economies of the west and the credit crunch.
And that was the shutdowns forced on businesses in and around Beijing (a 300 kilometre radius according to some reports) for the Olympics in August and September, plus the impact of the Sichuan earthquake and the early year impact of the huge snowstorms in January.
When taken together the drop in growth from an annual rate of 10.1% in the June quarter, to 9% in the September quarter, is understandable.
The figure was low, under market estimates of a 9.7% rise, but western and local forecasts about the Chinese economy can’t be that precise because the collection of the figures is less than ideal, as is the certainty that the statistics will be presented in an unvarnished fashion.
The 9.0% figure for the quarter gave an annual rate of 9.9% for the first nine months of the year, after a 10.4% rate for the first six months.
That was enough for the Central Government to reveal moves to help property prices (which are falling in many areas) and assist small exporters.
The government said that taxes on house purchases would be reduced and value-added tax rebates would be increased for exporters of textiles and machinery.
However, the scope and timing of such policy changes were not revealed and there is a debate about just how big a fiscal stimulus is needed to prevent a sharper slowdown.
It was the first time since the fourth quarter of 2005 that quarterly growth in China slipped into single digits, according to figures from the government.
The 9.9% figure is a notable reduction from the 12.2% for the first nine months of 2007.
The trade surplus hit a record of just over $US29 billion in September, but that will be the most recent high point as shipments start to slip. China’s industrial output grew 15.2% over the first nine months of this year, down from the 16.3% rate of the first six months.
Again the reductions on output in and around Beijing for the games should not be forgotten, nor should output cuts and closures by aluminium, copper, lead and zinc producers during the quarter as they should to try and cut stocks of unwanted products and match demand and output.
Growth in industrial output slowed to 11.3% in September.
Fixed asset investments, a key gauge of government spending on infrastructure and factories, rose 27.0% in the first three quarters of this year, compared with 26.3% in the first half, the bureau said.
Retail sales, a main indicator of consumer spending, increased 22.0% in the first three quarters of 2008 compared with the first nine months of 2007 and rose 23.2% in September.
Those figures are small, but interesting examples of what the Chinese government seems to be doing as export growth slows: it is attempting to restoke domestic demand.
Inflation looks like it has been tamed and is falling at the consumer level.
The spiralling upward surge in food prices had has slowed this year. They had been the major driver of rising consumer inflation in 2008 and the early months of this year.
But figures out yesterday from the Government’s statistics bureau revealed that consumer inflation hit 4.6% in September, and 7.0% in the first nine months of the year.
That is a lot better than the 7.9% inflation in the first half of 2008, and a near 12-year high of 8.7% recorded for the month of February when those winter storms boosted the cost of power and energy, as well as curtailing food shipments. That pushed up food prices.
The AMP’s chief economist, Dr Shane Oliver is one who doesn’t see gloom and doom in the forthcoming Chinese statistics.
He said in his weekly market note that the Chinese economic data will be watched closely for indications as to how fast it is now slowing down.
"Having just returned from China I must say that while China is in far better shape than the US its economy nevertheless looks to be cooling significantly on the back of slowing exports and a property slump.
"Pretty soon we will be talking about China’s factories exporting deflation to the world again, after the silly “China is now exporting inflation” fears that were doing the rounds earlier this year."
China’s Cabinet made a rare public statement on the economy Sunday, saying the economy can weather the effects of the global financial turmoil. But it also said that growth will decline as the expansion of business profits and public revenue slows.
The State Council said in a statement at the end of an executive meeting led by Premier Wen Jiabao that the turmoil and economic instability will have a "gradual" effect on the country.
It said China’s economic growth will slow along with corporate profits and public revenue, and as capital markets continue to fluctuate.
Newsagencies reported that the statement posted on a government website said "Unfavourable international factors and the serious natural disasters at home have not changed the basic growth situation of our country’s economy. Our country’s economic growth has the ability and vigour to resist risks."
China must "adopt flexible and cautious macroeconomic policies" to maintain stable growth, the statement said.
Steel prices in China have fallen about 20% and there are reports of small steelmakers being forced to close because of shrinking demand.
Mount Gibson, our fourth biggest iron ore exporter, has found that some buyers won’t take iron ore shipments, and on Friday Fortescue Metals revealed that it had been helping some Chinese customers with freight costs as iron ore spot and shipping costs h
