Thursday, July 15, 2010

Chinese Q2 GDP Slows Slightly to 10.3%, Singapore's Surges to 19.3%

Please take all government data with many grains of salt but...

#1 - China says it is engineering a slowdown 'perfectly' (it was reported earlier this week that property prices actually fell last month for the first time in over a year after some breakneck increases), and Q2 GDP fell to 10.3% from the wicked 11.9% gain in the previous quarter.  Inflation is back down below 3%. 

Via Bloomberg
  • China’s economic expansion eased to 10.3% in the second quarter and industrial production cooled more than forecast in June, signaling a deeper second- half slowdown that may add to risks for the global economy.
  • Second-quarter growth was less than the median 10.5% estimate. The moderation follows the government’s success in tempering credit expansion, investment spending and property speculation.
  • The gain in gross domestic product was less than an 11.9% increase in January-March from a year earlier.
  • Inflation cooled to 2.9% in June.
  • Industrial output rose 13.7%..
  • Analysts’ forecasts had indicated June inflation of 3.3% and industrial production growth of 15.1%.  
  • Urban fixed-asset investment gained 25.5% in the first six months of 2010 from a year earlier. The pace compares with a 33.6% increase in the first half of 2009, when a 4 trillion yuan fiscal stimulus program was kicking in.  [Feb 16 2009: Is China Pulling an Alan Greenspan?]
  • A clampdown on speculative real-estate purchases, via rules for buyers, developers and lenders, triggered the first month- on-month fall in property prices in more than a year in June.
  • The government may by year-end move to bolster spending by loosening quotas limiting bank lending, according to Nomura Holdings Inc. and Morgan Stanley.

As always, we like to hear from companies rather than governments - more telling than anything above:
  • Baoshan Iron & Steel Co., the biggest publicly traded Chinese steelmaker, cut prices this week, highlighting the weakness in industrial output that Credit Suisse AG. economist Tao Dong described as the “biggest worry” from today’s numbers.
Rather than show you the suffering chart of the Chinese stock market, a better check on the economy would be to have an electricity usage chart for the country.  In lieu of that, let me show you the chart of doctor copper.

[Translation - despite the rally in 'risk assets' the past week and a half, copper is stagnant... and China loves its copper when it is growing.]


#2 - Singapore's Q2 GDP shot up to nearly 20%, and raised forecasts for the year to 13-15% growth.  (keep in mind all year over year comparisons are versus a rotten 2009)

Via AP:
  • Gross domestic product in Singapore for April through June grew 19.3% from a year earlier when the economy was shrinking because of the global recession, the Trade and Industry Ministry said Wednesday. The growth was the fastest since the government began releasing quarterly GDP figures in 1975.
  • The ministry raised its forecast for the city-state's economic growth this year to a range of 13 to 15% from the previous forecast of 7 to 9%. It also raised its forecast for export growth as global demand has stayed strong amid Europe's debt and fiscal crisis.
  • Manufacturing in the April-June quarter recorded explosive growth of 45.5% compared with a year earlier.
  • Construction grew 13.5% while services expanded 11.4%. The opening of two casino resorts this year by Las Vegas Sands and Malaysia's Genting have helped attract record visitors.
  • Tourists and locals alike are buying more. Mastercard said its cardholders spent 23% more last month from a year earlier amid the start of an annual nationwide retail sale.
  • Citigroup said it expects Singapore's economy to grow 15.5% this year and 4.6% next year.
  • The tiny island nation is often seen as a barometer of world demand because its economy -- built on manufacturing and services like finance -- is one of the most export-reliant in Asia.

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