I am about to join my wife and daughter for a Chinese new year "celebration," which consists this year of the three of us eating at a Chinese restaurant. Oh well, not too much to celebrate at the moment. Welcome, anyhow, to the year of the ox.
China Worries
Asia News is reporting that things in China are somewhat worse than the official numbers indicate. Some 670,000 small industries have shut down and 6.7 million "registered" workers have lost their jobs since the peak. Millions more of unregistered workers only add to that number. It is now forecast that China needs to somehow create 33 million jobs in 2009 to have stability, and this ain't going to happen. Accordingly, the state news agency, Xinhua, who you would not expect to overstate the problems, is expecting a "peak period of mass incidents," as in social protests, rioting and the like.
http://www.asianews.it/index.php?l=en&art=14157&size=A
China now has five months of a manufacturing contraction with no end in sight as its trading partners all are sucking wind themselves.
http://globaleconomicanalysis.blogspot.com/2009/01/us-manufacturing-orders-at-60-year-low.html
Hot money outflows from China only add to the problem. During 2007 and early 2008 hot money flowed into China on expectations that China might fare the storm better than other countries. Some of it was based on a decoupling theory, which is now wholly discredited. With China now also on the ropes, that hot money is flowing out just as fast.
http://mpettis.com/2009/01/monetary-conditions-might-exacerbate-the-chinese-adjustment/
All said-and-done, I do not expect many Chinese are going to like ox much after this year is over. I am pretty sure we in the U.S. won't either.
I will try to post more after dinner.
Disclosures: None
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