China’s economy slowed this quarter as growth in manufacturing and transportation weakened in contrast with official signs of an expansion pickup, a private survey showed.
Increases in business-investment and real estate revenue also slowed, while service industries picked up and employees became tougher to find, the survey from New York-based China Beige Book International said Tuesday. The report is based on responses from 2,000 people from Aug. 12 to Sept. 4 as well as 32 in-depth interviews conducted later in September.
The quarterly report, modeled on the U.S. Federal Reserve’s Beige Book business survey, diverges from government figures showing faster July and August gains in factory production that have spurred analysts from Citigroup Inc. to Deutsche Bank AG to upgrade expansion estimates. Nomura Holdings Inc. is among banks skeptical that any rebound will be sustained next year.
The results “show the conventional wisdom of a renewed, strong economic expansion in China to be seriously flawed,” China Beige Book President Leland Miller and Craig Charney, research and polling director, said in a statement.
The data “reveal weakening gains in profits, revenues, wages, employment and prices, all showing slipping growth on-quarter ― no disaster, but certainly not the powerful expansion suggested by the consensus narrative.”
The report, like the Fed’s version, doesn’t give estimates of gross domestic product growth or other indicators beyond the survey results. The economy expanded 7.5 percent in the April-June period from a year earlier, slowing for a second quarter, according to China’s National Bureau of Statistics. The government has since introduced measures including faster railway spending and tax cuts to aid expansion.
The first China Beige Book, from the second quarter of 2012, said the economy was picking up, a few months ahead of official data indicating a rebound. This year’s second-quarter report showed expansion slowing across the country and a decline in companies taking out loans. (Bloomberg)
