There are numerous theories around that are suggesting that China has managed this slowdown extremely well and that their economy is bottoming now and in the fourth quarter. It is quite amazing how 9 guys (about to go to 7 guys) can get together and control a $7.5 Trillion economy with such precision.
Is that all there is to the China slowdown? Or are the numbers being massaged to make it look pretty for the handover of power?
I am not so sure this is the bottoming of the Chinese slowdown
The bigger the party, the bigger the hangover. (I should know this because I had my bucks party last weekend!!!)
China's fixed asset boom has no parallels. I would highly doubt that a country that is so "unbalanced, uncoordinated and unstable" as stated by its leader is able to have a such a short period of lower growth and all of a sudden start building empty buildings, empty apartments, empty offices, empty bridges, empty airports and empty trains at the rate it was during the 2009 to 2011 period. With the capital outflows out of China, it would seem that investors are not so convinced in the China economic miracle story anymore.
As BHP boldly stated last week that China has reached peak steel consumption, this suggests that there is going to be slower growth ahead.
Only time will tell, however I would suggest that those with their finger on the pulse like Michael Pettis, Jim Chanos and Patrick Chovanec have a higher probability of being right than those who didnt even see any slowdown coming.
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