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This article appears to be fairly good in describing signs of slowdown in China
http://www.businessweek.com/news/201...ng-point-.html
http://www.businessweek.com/news/201...ng-point-.html
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Re: China Slowdown
Originally posted by RTQ View Post
This is old news. The latest is a rise in defaults. This is typical of businessmen in China, if they can't roll the loans anymore, they will skip town with whatever cash balance is left in the company bank accounts, with no regard whatsoever to the laws, leaving employees and suppliers in the lurch. Very soon, all suppliers will ask for cash in advance, no one will trust anyone.
http://www.businessinsider.com/china...ankrupt-2011-9
Read more: http://www.businessinsider.com/china...#ixzz1Z4cIKrfYA Bunch Of Chinese Manufacturing Bosses Just Defaulted And Fled Their Failing Businesses
Linette Lopez | Sep. 23, 2011, 12:41 PM | 10,436 | 42
China's papers are calling it their "own subprime crises."
According to Shanghai Daily, 7 large business owners, mostly manufacturers, fled the city of Wenzhou on September 12th. They left thousands of employees jobless and hundreds of millions in unpaid debt.
This is one of the consequences of China's "black bank," the massive undergound banking system that has been growing at a dizzying pace since the government started tightening credit to curb inflation. Banks favor state-owned businesses when it comes to lending, so when private business owners need to take out a loan, they turn to the alternative, to the underground.
Going to the undergound has two consequences: For those who take out loans, it means having to pay much higher interest rates than they would if they borrowed legitimately. For the lender, it means that if a loan goes unpaid, there isn't much that can be done about it.
In other words, if business is bad for a business owner with an underground loan, they can just walk away. So they do.
One of the runaway employers is Hu Fulin, the owner of Zhejiang Center Group (ZCG). ZCG owns the most popular sun-glass company in China (they make 20 million pairs a year) and employed 3,000 people. He also invested in real estate and the renewable energy industry.
Hu is penniless now, but he owes his employees their August and September salaries (about $1.5 million), and he hasn't paid his suppliers either. The city government has set up a task force to figure out how to track all of Hu's loans and repay his debts.
It's rare that the authorities are able to catch bankrupt business owners before they leave town, but sometimes it happens. Zheng Zhuju, the 49 year old owner of a home appliance store, tried to skip Wenzhou leaving $43.8 million in unpaid, underground debt. She was arrested beforehand, though, and has been incarcerated since September 13th. -
Re: China Slowdown
China Manufacturing Contracts for Third Month, Survey Shows
September 30, 2011, 1:11 AM EDT
Sept. 30 (Bloomberg) -- A gauge of Chinese manufacturing shrank for a third month, the longest contraction since 2009, as measures of new orders and export demand declined.
The reading of 49.9 for the September purchasing managers’ index, released by HSBC Holdings Plc and Markit Economics today, was unchanged from August and compared with a preliminary 49.4 figure published last week. The gauge was below 50, the level that separates expansion from contraction, for eight months through March 2009...Comment
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Re: China Slowdown
This is probably worse for gross world product than we realize. It's BRIC-wide. Brazil is hit hardest for now...but it's not a good omen.Originally posted by GRG55 View Post
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