China slowdown – broad media coverage

Since I first mentioned the NY Times article about a slowdown in China (see blog post here) , I’ve seen several other similar news stories. Perhaps now I’m more attuned to the topic.  Or perhaps this story sells newspapers and is simply recirculating.  Or maybe this is gaining traction as increasingly significant and not easily dismissed.  A Chicago Tribute article said such things as:
  • “For rice wine maker Shanghai Jinfeng Wine Co, a 14 percent inventory increase plus slowing demand means it would take 22 months to clear stockpiles at the current sales pace, compared with nine months at the end of last year”
  • “Chinese auto dealer Dah Chong Hong Holdings amassed so much inventory this year that it would take 63 days to sell all of its Bentleys, Toyotas and Isuzus, up from the 42 days’ supply it carried in December.”

A Twin Cities’ Star Tribune article reports:

  • “The glut of steel, household appliances, cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and led manufacturers to redouble efforts to export what they cannot sell at home.”
  • “Wu Weiqing, the manager of a faucet and sink wholesaler, said that his sales had dropped 30 percent in the past year and he has piled up extra merchandise. Yet the factory supplying him is still cranking out shiny kitchen fixtures at a fast pace. “My supplier’s inventory is huge because he cannot cut production — he doesn’t want to miss out on sales when the demand comes back,” he said.”
  • “Inventories of unsold cars are soaring at dealerships. Quality problems are emerging. And buyers are becoming disenchanted as car salesmen increasingly resort to hard-sell tactics to clear clogged dealership lots. So many auto factories have opened in China in the past two years that its industry is operating only at about 65 percent of full capacity — far below the 80 percent usually needed for profitability.”

Not only is China the world’s second largest economy, it is growing and serves as a growth driver for the global economy (many developed economies are largely stagnant).  This observation regarding concerning news stories about China is clearly an unscientific sample with limited scope, but such stories do not appear to be hard to find.  I remain alert.

sources: Chicago Tribute, Star Tribune

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