Economy

Data Shows China Slowdown Much Worse Than China Admits

China’s second-quarter economic data shows a 6.2 percent growth; however, economists and investors believe the numbers are worse than what is being officially released, The Wall Street Journal reported.

China’s reported data came in close to Beijing’s target, a figure that has been published quarterly for the past 4.5 years. But a multinational index of Chinese production indicates a much smaller growth coupled with fewer workers returning to their jobs.

“Manufacturing is being hit really hard,” said Leland Miller, CEO of China Beige Book, which measures China’s economic strength. The results are culled from mainland survey responses. “Investment is down, hiring took a serious hit, a huge hit to new orders.”

Despite showing economic stability, global economists, companies, and investors believe China’s economic picture is weaker than what is being officially reported.

Some economists say the numbers are likely 3 percentage points lower after accounting for tax revenue, property sales and other concrete measures.

In a move intended to boost business as the trade war continues with the U.S., China on Friday (Sept. 6) flooded banks with billions of dollars after The People’s Bank of China lowered how much was required to be kept in reserve.

Eric Pratt, head of global marketing at AVX Corp., an electronic components manufacturer, told the WSJ the data “is telling us nothing good about the China economy.” The South Carolina company has two Chinese factories. Pratt said economic indicators prompted his company to cut jobs and production.

Small changes in China have a major impact on economies in the U.S., Germany, and Japan. Access to reliable Chinese data has been a problem, and there is a growing suspicion that China has been tweaking the numbers.

To bolster the country’s economy, the central bank of China said it was reducing the amount of cash that banks need to have as reserves for the third time in 2019. It released $126 billion — or 900 billion yuan.

——————————

LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

TRENDING RIGHT NOW