Date
17 January 2017
National sales revenue, volumes, output, prices, profits, hiring, borrowing, and capital expenditure were all weaker in the fourth quarter than the prior three months, according to a private survey. Photo: AFP
National sales revenue, volumes, output, prices, profits, hiring, borrowing, and capital expenditure were all weaker in the fourth quarter than the prior three months, according to a private survey. Photo: AFP

China Beige Book shows widespread weakness across economy

China’s economy deteriorated across the board in the fourth quarter, a private survey from a New York-based research group shows.

That compares with recent official indicators that signaled some stabilization in the economic slowdown.

Bloomberg is reporting that national sales revenue, volumes, output, prices, profits, hiring, borrowing, and capital expenditure were all weaker than the prior three months.

The report cited the fourth-quarter China Beige Book published by CBB International, which is modeled on the survey compiled by the Federal Reserve on the US economy and first published in 2012.

The world’s second largest economy lacks the kind of comprehensive data available on developed nations, making it harder for investors to get a clear read, it said.

This is particularly important as China transitions from reliance on manufacturing and investment toward services and consumption.

Official data on industrial production, retail sales and fixed-asset investment all exceeded forecasts for November while consumer inflation perked up and a slide in imports moderated.

The Beige Book’s profit reading is “particularly disturbing”, with the share of firms reporting earnings gains slipping to the lowest level recorded, CBB President Leland Miller wrote in the release.

While retail and real estate held up reasonably well, manufacturing and services performed poorly, with revenues, employment, capital expenditure and profits weakening.

The survey shows “pervasive weakness,” Miller wrote in the report. “The popular rush to find a successful manufacturing-to-services transition will have to be put on hold for a bit. Only the part about struggling manufacturing held true.”

After efforts including six interest-rate cuts since late 2014 failed to revive growth, policymakers are switching focus to fix problems like overcapacity on the supply side.

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