So what are we to make of two very conflicting pieces of information about the Chinese economy?
On the one hand industrial production fell sharply in November to a level well below that forecast by economists in or out of China as exports slumped and the domestic economic slowdown continued to deepen.
But shipbrokers are starting to report increasing chartering interest from China and heavily depressed rates for China-sized bulk carriers are now costing up to three times what they were a couple of weeks ago.
The increased demand is said to be coming from Chinese buyers of heavy bulk commodities like iron ore and coal.
It flies in the face of the message being sent by the 5.4% rise in industrial output in China in November: a rate that matches the sharp fall in sentiment measured by an ISM survey two weeks ago.
Seeing output grew 8.2% in October, Chinese production actually decreased in the month of November alone.
The official figures tell the story: electricity output fell by 9.6% from a year earlier; pig-iron production fell 16.2%; raw steel was off 12.4%, output of steel tumbled 11%. Vehicle production fell 15.9% and car output dropped 10.1%.
The slump in steel isn’t surprising, but Bloomberg reported the industry body as forecasting a fall in China’s steel exports next year even after the central government removed some export taxes that were designed to curtail shipments.
The Government indicated at the weekend that China will boost money supply by 17% next year and allow bank lending to rise by around 16%.
Exports slumped 2.2% in November and like Japan, the link between exports and industrial output seems to be quite firm at the moment with the domestic Chinese economy experiencing falling demand because of the housing slump.
That fall was the first for seven years and economists started forecasting a low number for industrial output for November.
But none of those surveyed by Bloomberg went as low as 5.2%, a sign the economy is sliding faster than thought.
The government warned last week of “increasing downward pressure on the economy” and pledged to boost spending, cut taxes and do more to create jobs to maintain social stability.
The State Council last month announced a 4 trillion Yuan ($US586 billion) spending package to sustain growth through 2010.
The slump in output will undoubtedly bring lowered forecasts for 2008 and 2009 growth for China.
At present the World Bank has Chinese growth next year at 7.5% after growth this year of around 9.5%. Some private economic forecasts are much lower: down around 4%.
So what then about reports in the shipping and finance media that demand is rising for bulk carriers from China?
For example the Financial Times is reporting that Chinese demand for iron ore and coal pushing some average charter prices up almost threefold in the past week.
"The revival in prices, after a disastrous six months for the industry in which charter rates fell nearly 99 per cent for the largest vessels, could encourage ship-owners to bring mothballed vessels back into service.
"One participant said yesterday that some owners were able to charge enough to cover the costs of operating Capesize ships, the largest dry bulk carriers. Average rates for these ships, which move coal and iron ore, have nearly tripled over the past week.
"However, smaller ships have yet to show the same recovery as Capesize vessels.
"Average spot rates, or the cost of carrying a single cargo immediately, finished the week at $8,261 a day for Capesizes, according to figures from Pareto Dry Cargo, an Oslo shipbroker.
"The previous week’s average was $2,763, one of the lowest yet seen. Pareto reported a long-term charter of a Capesize ship at $17,500 a day for a year, more than the daily basic operating costs of such a ship.
"Long-term charter rates are, unusually, higher than those in the spot market because of expectations that the spot market will recover."
Australian resource companies say they are not seeing any upturn in demand, just some restocking by Chinese buyers who ran down stocks during the now ended price dispute with CVRD of Brazil in October and November.
The rates are a long way from the silly levels of this year, when Capesizeed-ships hit a record average charter rate of $US233, 988 a day on June 4.
ABARE, the Federal Government commodity forecaster said yesterday in its latest survey that it sees China growing around 8% next year.
"Looking ahead, economic growth in China is assumed to ease in 2009, but remain relatively strong. Partial indicators released recently support this assessment.
"While growth in industrial production slowed to a year on year rate of 8.2 per cent in October 2008, from an average of around 18 per cent in 2007, growth in retail sales and fixed asset investment continued to be solid.
"Urban disposable incomes rose year on year by 14.7 per cent in the first nine months of 2008 and rural incomes increased year on year by 19.6 per cent over the same period.
"In preparing this set of commodity forecasts, economic growth in China is assumed to average 8.0 per cent in 2009, following estimated growth of 9.6 per cent in 2008.
"The Chinese authorities have indicated their intention to stimulate economic growth and employment using a range of fiscal policy measures such as increased infrastructure spending and tax cuts for exporters. In early November 2008, the Chinese Government announced a fiscal "stimulus package totalling 4 trillion Yuan (or US$586 billion)."
The November export and the industrial
