Headlines on latest China news, China business from ECONOMIST

Economist Global growth: Falling beneath the threshold

1/18/2012 12:34:04 PM GMT
THE first two weeks of 2012 have been less newsy than the first fortnight of 2011. The impression of growing stress across much of the world economy is nonetheless inescapable. Trouble is brewing. It's been brewing; it's spilling over the brewpot, for god's sake won't someone stop this damned brewing.The World Bank provides a big picture take on the shaky world economy today, with the release of its Global Economic Prospects report. Global growth is expected to slow slightly in 2012, and the euro-zone economy is forecast to shrink 0.3% for the year. The chart at right gives a sense of how much darker the global picture has grown over the past 7 months. The outlook for the euro zone has deteriorated most rapidly, but diminishing optimism is quite widespread.It's quite difficult to read the World Bank report and not conclude that more downward revisions of expectations are likely to occur. It's chock full of looming risks. The euro area is obviously the point of greatest concern, but other regions are vulnerable and may succumb to crisis pressure. Many emerging markets, the report notes, have less fiscal room to battle a slowdown than was true in 2007. Many will also need to finance plenty of their own debt this year, and could find themselves in significant trouble if ongoing euro problems suck more capital back to the continent.The authors of the report game out two ...

Economist Chinese air pollution: Clearing the air?

1/12/2012 4:04:02 PM GMT
In the case of official reports about the improving air quality in Chinese cities, however, taking Mr Deng’s advice is easier. To evaluate a specious government report of yet another “blue-sky day”, you need only look out the window, sniff the air, or—for the brave—take a deep breath. In Beijing recently the facts have been speaking for themselves. Smog is often so bad that residents cannot see buildings just across the street, schools cancel outdoor activities and the airport cannot operate.

Economist The euro crisis: Just a tiny recession

1/11/2012 6:13:01 PM GMT
GERMANY had a very good 2011. Its economy grew by 3% on the year, helping bring unemployment down from nearly 7% to just 5.5% (as of November). No other large, developed economy performed nearly as well. If the Germans are tempted to pat themselves on the back and celebrate, however, they should think twice. Growth peaked back in the second quarter and slowed sharply thereafter. Odds are good, in fact, that the German economy shrank in the last three months of 2011. Low unemployment should boost consumer spending and provide domestic demand support to growth, but exports remain Germany's bread and butter. Private consumption rose by 1.5% in 2011, compared to an 8.2% jump in exports. And Germany's export markets are in trouble.The largest destination for its goods is obviously the euro zone. The single-currency area is descending into a dangerous recession. Since much of the euro zone is desperately trying to move from current-account deficits to current-account surpluses, the recession will be longer and deeper the more Germany manages to protect its net exports. Germany's surplus with Europe can only decline.America is the next largest customer and seems likely to have a better (though not obviously great) 2012. Then comes Britain, which is probably back in recession. And then China. China's still growing, you say, and you're right. What's more, its trade surplus ...

Economist China's growing bubble: Counting on China's credit

1/10/2012 4:00:04 PM GMT
IN THESE dire economic times for the Western world, it is comforting to see Asia—in particular, China—as our saviour, with its economy forever growing (8.2% for 2012, we predict) and now in the process of becoming less mercantilist. But let’s not get too relaxed…For a sobering look at what is happening in the credit-profligate People’s Republic, Cassandra advises you to read an excellent article in the China section of The World in 2012 and then to listen to Carl Walter, an investment banker in Beijing, who shared his thoughts on China’s future at The World in 2012 festival in New York.   

Economist China’s economy: China’s version of contraction

1/5/2012 4:00:04 PM GMT
A reading below 50 is supposed to show that manufacturing is shrinking. The November figure was therefore especially traumatic. The first sub-50 reading since February 2009, it prompted the central bank to ease monetary policy on the eve of publication. By the same token, the uptick in December garnered lots of attention because it carried Chinese manufacturing across the dividing line between contraction and expansion.

Economist The world economy: Self-induced sluggishness

1/5/2012 4:00:04 PM GMT
In one way this pessimism looks a little overdone. The worst outcomes—a collapse of Europe’s single currency or a hard landing in China—are avoidable. The latest crop of statistics, particularly better-than-expected figures on global manufacturing prospects, argue against a sudden slump. America may do a bit better than forecast. The overall effect should be sluggish, not dire: global output may grow by 3%, the slowest since 2009 and well below the average of the past decade.

Economist Television in China: Let me (not) entertain you

1/5/2012 4:00:04 PM GMT
According to an order that took effect on January 1st, China’s 34 satellite television stations must limit “excessive entertainment” and “vulgar” content. This means cutting back severely on their most popular, low-cost and lucrative programming. “Super Girl”, a much watched singing contest, is no more, after officials accused it of being overlong and of poisoning youth.

Economist Economics focus: How to get a date

12/28/2011 4:03:03 PM GMT
Economic power is best gauged by looking at absolute size rather than per-person measures. On a few indicators, such as steel consumption, ownership of mobile phones and beer-guzzling (a crucial test of economic superiority), the milestone was reached as long as a decade ago. Several more have been passed since. In 2011 China exported about 30% more than the United States and spent some 40% more on fixed capital investment. China is the world’s biggest manufacturer, and partly as a result it burns around 10% more energy and emits almost 40% more greenhouse gases than America (although its emissions per person are only one-third as big). The Chinese also buy more new cars each year than anybody else.

Economist Daily chart: TEST PAGE

12/27/2011 3:06:01 PM GMT
We invite you to predict when China will overtake America AMERICA'S GDP is still roughly twice as big as China’s (using market exchange rates). To predict when the gap might be closed, The Economist has updated its interactive chart above with the latest GDP numbers. This allows you to plug in your own assumptions about real GDP growth in China and America, inflation rates and the yuan’s exchange rate against the dollar. Over the past ten years, real GDP growth averaged 10.5% a year in China and 1.6% in America; inflation (as measured by the GDP deflator) averaged 4.3% and 2.2% respectively. Since Beijing scrapped its dollar peg in 2005, the yuan has risen by an annual average of just over 4%. Our best guess for the next decade is that annual GDP growth averages 7.75% in China and 2.5% in America, inflation rates average 4% and 1.5%, and the yuan appreciates by 3% a year. Plug in these numbers and China will overtake America in 2018. Alternatively, if China’s real growth rate slows to an average of only 5%, then (leaving the other assumptions unchanged) it would not become number one until 2021. What do you think?   A broader analysis by The Economist finds that China has already overtaken America on well over half of 21 different indicators, including manufacturing output, exports and fixed investment. The chart above predicts when China ...

Economist Daily chart: The dating game

12/27/2011 2:00:00 PM GMT
We invite you to predict when China will overtake AmericaAMERICA'S GDP is still roughly twice as big as China’s (using market exchange rates). To predict when the gap might be closed, The Economist has updated its interactive chart below with the latest GDP numbers. This allows you to plug in your own assumptions about real GDP growth in China and America, inflation rates and the yuan’s exchange rate against the dollar. Over the past ten years, real GDP growth averaged 10.5% a year in China and 1.6% in America; inflation (as measured by the GDP deflator) averaged 4.3% and 2.2% respectively. Since Beijing scrapped its dollar peg in 2005, the yuan has risen by an annual average of just over 4%. Our best guess for the next decade is that annual GDP growth averages 7.75% in China and 2.5% in America, inflation rates average 4% and 1.5%, and the yuan appreciates by 3% a year. Plug in these numbers and China will overtake America in 2018. Alternatively, if China’s real growth rate slows to an average of only 5%, then (leaving the other assumptions unchanged) it would not become number one until 2021. What do you think?    A broader analysis by The Economist finds that China has already overtaken America on well over half of 21 different indicators, including manufacturing output, exports and fixed investment. The chart below predicts when China ...

Economist China’s economic decision-making: Prudent and proactive

12/15/2011 4:00:04 PM GMT
This year’s conference, which ended on December 14th, seemed more worried about growth than about price pressures. Inflation is now receding (consumer prices rose by 4.2% in the year to November, after peaking at 6.5% in the summer); and dollar inflows are also slowing, removing one source of extra liquidity. That has allowed the government to cut the amount it tells banks to keep as reserves. Most economists expect it to carry on cutting in the year ahead. Nonetheless, the CEWC chose to describe its monetary policy with the same word (“prudent”) it used last year, when fighting inflation was the priority. It suggests the leaders will cut cautiously.

Economist China’s economy and the WTO: All change

12/8/2011 4:17:00 PM GMT
The price of re-entry was as steep as the wait was long. China had to relax over 7,000 tariffs, quotas and other trade barriers. Some feared that foreign competition would uproot farmers and upend rusty state-owned enterprises (SOEs), as to some extent it did. But China, overall, has enjoyed one of the best decades in global economic history. Its dollar GDP has quadrupled, its exports almost quintupled.

Economist Chinese politics and the WTO: No change

12/8/2011 4:17:00 PM GMT
China’s media have been trumpeting the tenth anniversary on December 11th of the country’s WTO accession. In China as much as in America, the event was seen as of far greater importance than a mere pledge by China to reduce barriers to its markets (moves towards which had long been under way). For both countries it was a crucial part of restoring calm to a relationship that had been marred by annual fights in Congress over whether to keep granting China most-favoured-nation trading status (as enjoyed by most of America’s other trading partners). Mr Clinton’s remarks preceded bitterly contested votes in Congress in 2000 that ended the annual renewal process and ensured America would share any benefits from the market-opening measures pledged by China on entering the WTO.

Economist China's currency: Yuan goes up, must come down

12/7/2011 11:29:04 AM GMT
BACK in July, a souped-up version of The Economist's Big Mac index indicated that China's currency actually seemed to be near its fair value. That didn't prevent politicians in America and elsewhere from keeping the pressure on China to allow its currency to appreciate faster, even as Chinese labour costs grew rapidly. In October, America's Senate passed a bill that would require the government to consider currency manipulation in judging the fairness of import prices: a step calculated to make it easier to levy tariffs on Chinese goods.The world has become a much different place since this summer, however. Emerging-market growth is quickly flipping from red hot to worrisomely flat. Chinese factory activity is declining, according to the latest measures, while India's growth is disappointing and Brazil's has vanished, as of the third quarter. At the same time, financial troubles in Europe are contributing to capital outflows from large emerging markets and corresponding declines in currency values.One might have expected China to dodge these pressures. The yuan has long been deemed undervalued while other emerging markets fretted about the overvaluation of their currencies. China has long run a current account surplus, suggesting that upward adjustment of the exchange rate is necessary, and has enjoyed corresponding reserve growth. And China's capital markets are tightly ...

Economist Money talks: December 5th 2011: An enormous multilateral achievement

12/5/2011 1:52:01 PM GMT
America's economy improves a bit, Europe holds another summit and we mark the tenth anniversary of China's membership in the WTO