BROKEN CHINA


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From corporate profits, tax revenue, rail freight, property sales, and other economic measures, the world’s largest economy is much weaker than the “official” government data.  

For example, according to various studies, China’s unemployment rate is 5.3 percent, not the lower 4 percent range the government has been putting out.

Indeed, as goes China, so too does much of the world’s economy.

It is estimated that between a quarter and third of the entire global economic expansion over the past ten years has been driven by China.  

The stronger the consumer segment, the higher sales go.

On their “home” front, housing accounts for 25 percent of GDP growth.

In an attempt to arrest slowing growth demand, last week China injected $126.4 billion to boost bank lending capacity and lowered their reserve requirement ratios to reverse economic contraction. 

Despite these measures, the Trends Journal assessment is “too little too late.”  

Adding to their burden is the “hidden debt” of over $500 billion spent by provincial governments which must be paid back before the end of the year. But, as indicators reveal, the money is not there to be paid back.

Overall, it is being reported that an increasing number of economists have lowered China’s GDP below 6 percent, not 6.5 percent growth range the government contends.

For example, in August alone, imports were down 5.6 percent – the eighth fall in the past nine months.

TRENDPOST: A key indicator for both developed and underdeveloped nations is to actively monitor car sales, which act as a barometer of living standards. 

China’s auto sales, which account for about 10 percent of its GDP, contracted 6.9 percent in August. Passenger car sales, the fourteenth consecutive decline, have fallen 11 percent year-to-date.  

Over in India, auto sales are down for each month of the year, fell 41 percent in August, its worst drop ever.

And they’re even down “Down Under.” In Australia, where average household incomes per capita decreased, taking people back to the levels of 2010, in August, car sales fell for the seventeenth month in a row.  Year-to-date sales are down 8 percent. 

The weakness of the auto industry will be a major factor in the increasing speed of the global slowdown. Reading the data in this section, it’s clear that with median income stagnant and car prices going up, the troubles of the car industry are going to get worse.

While auto sales boosted U.S. consumer spending in August, the weakness of the auto industry has fallen deeper in Europe.

For example, the pessimism rang clear at the world’s largest automobile event of the year, the “International Motor Show” in Frankfurt, Germany.  

One newspaper headline reads, “Executive Dread Clouds Frankfurt Auto Show,” and another “An Industry Shakeout is Coming.”  

Neither Toyota nor Fiat Chrysler exhibited at the Show, citing the high cost of display isn’t worth the potential upside. 

Moreover, as the industry puts more of its resources in the future on electric/hybrid vehicles, which highlighted the event, electric cars and plug-in hybrid vehicles accounted for just 2.4 percent of overall car sales in the EU. 

Why?

Batteries, first invented in 1800, are essentially an antiquated technology. It was one of our Top Ten Trends for 2017.

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