Growth to rule: As China’s economy keeps running – n-tv.de NEWS

 Economy
 

 Saturday, July 16, 2016

 
 
 

 
 With strong economic-doping the communist leadership China’s economy has stabilized for the time being in Beijing. But the price is high. Beijing must prepare themselves for what.
 

 
 

At the beginning of the year had brought concerns about China’s economy, the world’s financial markets to fishtail. Meanwhile, calm has returned. Even though economic growth with 6.7 percent more remains relatively low in the second quarter: A further slowdown is failed, the authorities assured in Beijing

In the first quarter the economy grew at this rate.. During the stabilization experts were surprised, it fits perfectly with the five-year plan of the communist leadership. So is everything good again? No, economists warn, because at second glance, the picture looks worse than shown. The government had bought the expensive growth – with all the risks and side effects

The experts doubt not only the official figures on the economic performance of -. Growth by provision, that sounds suspicious. More importantly: Other data that provides a better picture facing forward, draw a gloomy picture. International financial experts have become more pessimistic again according to a survey to China, say economists from the Centre for European Economic Research (ZEW). “A forthcoming economic downturn can be seen especially on the further decline in expectations for exports,” said the economist.

exports and consumption shrink

And these expectations have to figures from Wednesday once again confirms that China’s exports fell by 4.8 percent in June. Since 2015, the exports are almost universally in decline. While this development reflects again that China’s economy is in a fundamentally sound conversion process, away from the suppliers of cheap goods for the rest of the world towards a more concentrated on the internal market economy. The only problem is: Even the single market come signals of weakness

Even imports slumped by 8.4 percent again in June.. “This reflects a sharp decline in domestic consumption,” says Stefan Large, expert at Landesbank Nord / LB. And the trend is already for a long time. Since November 2014, imports have steadily declined, in some cases significantly more than last.

If you look closely, therefore crumbling image of the stabilization of the Chinese economy. Of particular concern is the fact that even the little heady status quo could only be achieved with strong economic-doping, which has administered the communist leadership of the economy. And the risks of this doping are large.

A water head full loans

For a long time Beijing holds ailing companies with cheap loans afloat. From “zombie companies” experts speak. The consequences are immense overcapacity and an ever increasing volume of lending. In June alone, lending increased compared to the previous year converted 14 billion euros. The recent growth rate was “accomplished almost exclusively by a rapid expansion of credit,” said Christopher Balding of the HSBC Business School in Shenzhen.

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Dark looks also the judgment of the Bank for International Settlements. Warns of a troubling relationship between credit volume and economic performance in China. is the recent development of an extent as it had shown in the story regularly against financial crises. Of particular concern is the high number of bad loans on the balance sheets of China’s banks. The volume of these securities has risen in the past twelve months by more than 40 percent to around $ 210 billion

And an end to the life support for China’s economy, the guide should allow hardly. too big is the risk of a hard landing of the economy. Therefore, experts expect even further steps. Firstly therefore likely even more money is pumped from the Treasury in the company and the tax could be lowered. Secondly, could intervene China central bank. Hao Zhou, economist at Commerzbank, expects in the coming months with a rate cut and with an easing of the rules for lending by banks.

  Source: n-tv.de
 

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