Once Sizzling, China’s Economy Shows Rapid Signs of Fizzling

Each new forecast of China’s economic fortunes predicts slower growth than the forecast that preceded it.

By David Barboza
The New York Times

Just as China attained supercharged growth that astounded much of the world, it appears to be slowing more sharply and more quickly than anyone anticipated.

“It’s tough to be optimistic,” said Stephen Green, an economist at Standard Chartered Bank in Shanghai. “The three engines of growth — exports, investment and consumption — have all slowed down.”

The signs are so troubling that last week Prime Minister Wen Jiabao warned that this year would be “the worst in recent years for our economic development.”

A series of government reports released over the last few weeks indicated that China’s export juggernaut was moderating. Real estate construction projects are being suspended. Consumer confidence is in decline. And many factories in southern China are closing, putting tens of thousands of migrant laborers out of work.

Some Chinese companies have even reported that Christmas orders — which were supposed to be placed in late summer or early fall — were down 20 percent this year, as big retailers and toy marketers grew gloomy about the holiday season.

Until recently, many economists had insisted that China was insulated from the global financial crisis rippling through the United States and Europe, and that the Chinese Communist Party had the tools to keep the economy chugging along. But newly released data suggests that nearly every sector of the economy is slowing and credit is tightening in a nation that has grown accustomed to sizzling hot growth.

While few economists expect China to fall into recession, analysts are forecasting the worst growth in more than a decade, with the economy expected to expand by as little as 5.8 percent in the fourth quarter this year, down from about 11 percent in 2007.

Read the rest:
http://www.nytimes.com/2008/11/07/business/world
business/07yuan.html?em

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