China says Industrial Output to Climb in Second Quarter

For those of us who have spent their entire lives as we all have, but for those who count themselves baby boomers doubly so, it is difficult to rid oneself of the notion that US economy is the center of the universe. US weakness and floundering is no longer shared relentlessly by the rest of the globe.

Today half of the global population expects to end their lives as members of the global middle class. They are beginning to make their consumption felt. Nowhere is this more clearly true but in China. China held off expanding their internal market because they simply could ill afford to keep up with their export driven economy.

After twenty years they needed a break in the pace in order to focus on building the internal Chinese market. The shift has taken place and this news item reflects that. Last year every village had shipped out all available manpower. This year twenty million went home. I think that they will be quickly back to work as the internal economy develops traction.

We are talking of a proper medical system and plenty of public works consolidation. Perhaps that old perennial of a paved road to every village will be the leading slogan.

Chinese credit markets are in their infancy and are expanding. Internal real estate is able to generate huge employment and will.

China has been very good and careful in managing their foreign reserves. They are now spending to buy up cheap raw materials everywhere and this is recycling those reserves in a way that is globally beneficial. China does not have to bail out a collapsed banking sector.

They plan to come out of this economic shock much richer and stronger.

China says industrial output growth to jump in 2Q

by Staff Writers
Shanghai (AFP) May 22, 2009

China on Friday said industrial output is expected to rise eight percent in the second quarter and exceed ten percent in the second half of the year as stimulus measures kick in.

The Ministry of Industry and Information Technology forecast the second quarter would post a jump from the 15-year low of 5.1 percent growth seen in the first three months of the year.

"The overall situation in both heavy and light industries is turning positive," the ministry said in a report on its website.

"The rapid pace of decline in production in some regions and industries has already slowed, while companies become more adaptable to the economic downturn and market fluctuations," the ministry said.

China's eastern coastal regions, the powerhouse of the country's economy, recorded 6.7 percent growth in industrial output in April, three percentage points higher than the first quarter, the report said.

The trade-dependent Chinese economy, the world's third-largest, has been severely hit by the global financial crisis, but Beijing has announced various packages and tax incentives to spur the economy.

The government at the end of last year unveiled a 590 billion dollar stimulus aimed at kickstarting the economy, which has been battered by the global slump.

Despite the optimistic outlook, the ministry also warned that weak external demand continued to be a big barrier to achieving a broad-based recovery.

"Reversing the downturn in industrial output growth should be placed as the top priority in economic plans... (We) should continue to boost domestic demand to promote industrial output growth," the report said.

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