Is China’s Economy in even Deeper Trouble than We Think?

[marmar]

Is China’s Economy in even Deeper Trouble than We Think?
by Wolf Richter • April 12, 2016


[font color="blue"]Rail freight volume plunges to 2007 levels.[/font]

Rail freight volumes are an indicator of China’s goods-producing and goods-consuming economy, not just manufacturing, construction, agriculture, and the like, but also consumer goods. Thus they’re also an indication of consumer spending on goods. Alas, rail freight volume is collapsing: the first quarter this year puts volume for the whole year on track to revisit levels not seen since 2007.

While China’s economy was strong, rail freight volumes were soaring. For example, in 2010, when China was pump-priming its economy, rail freight volume jumped 10.8% from a year earlier. In 2011, it rose 6.9%. It had soared 44% from 2005 to 2011! But 2011 was the peak.

In 2012, volume in trillion ton-kilometers declined one notch and in 2013 stagnated. But in 2014, volume skidded 5.8%. And in 2015, volume plunged 10.5% to 3.4 billion tons, according to Caixin, citing figures from the National Railway Administration. It was the largest annual decline ever booked in China.

It was a year that the People’s Daily, the official paper of the Communist Party, described in this elegant manner:

Dragged by a housing slowdown, softening domestic demand, and unsteady exports, China’s economy expanded 6.9% year on year in 2015, the weakest reading in around a quarter of a century.

Which is precisely where things stop making sense: rail freight volume plunges 10.5% in 2015, and the economy still increases 6.9%? I mean, come on. .............(more)

http://wolfstreet.com/2016/04/12/china-rail-freight-volume-plunges-2016-2015-economy-even-in-deeper-trouble/

[LiberalArkie]

1. The price for cargo ship tonnage has dropped through the floor also. Which only means one thing.

The shipping these days are "just in time". The stores do not have big warehouses any more to store large quantities, they order and have the goods delivered from the factory right when they need them.

So the problem must be that orders to China are not being placed because of very slow demand from the U.S. and other countries. The consumer boom has burst. And why? Greed.

[DetlefK]

2. You cannot measure China's economy like a real trade&market-based economy.

If China needs economic growth, they use taxpayer-money to make workers build stuff.
What kind of stuff?
Doesn't matter.
Will somebody buy this stuff?
Doesn't matter.
The only thing that matters is that the chinese people witness a never-ending success-story of economic growth.


The chinese industry is not part of the chinese economy. The chinese industry is a tool to further the interests of the Communist Party.
What happens if a private corporation endangers the goals of a state-owned corporation? Then the private corporation gets bought up or destroyed.


China is producing shit-tons of steel that nobody buys.
China is domestically building MILLIONS (no, absolutely not kidding) of buildings nobody needs.
THAT is where this fantastic economic growth comes from.

http://www.truth-out.org/news/item/31478-china-s-communist-capitalist-ecological-apocalypse