• Home
  • About/Contact Us
  • …Donate…
  • Subscribe
  • Commenting
  • Privacy
  • DISCLAIMER
  • Interesting Stuff

Leland Miller Deconstructs China’s Exaggerated Recovery Narrative

Taps Coogan – December 29th, 2020

Enjoy The Sounding Line? Click here to subscribe.

Leland Miller, CEO of China Beige Book International and one of the best informed observers of China’s economy has once again gone on record saying that official Chinese data is exaggerating the economy recovery this year. While China is officially claiming that GDP growth is positive year-over-year, which is to say that the Chinese economy has completely recovered from the ongoing Covid pandemic and then some, Mr. Miller meticulously deconstructs that narrative based on the results of his extensive private economic surveys.

 

Mr. Miller on the difference between what he sees and official data:

“Where we break from official data is the intensity of the recovery. We are seeing a recovering economy. We are seeing an economy that’s recovered better than just about anywhere in the world, but from a year-over-year standpoint, we are still seeing them not up to 2019’s level yet… We are not seeing these sky-high levels of year-over-year growth that Beijing is preparing to announce. It’s a major difference…”

On the mystery between China’s surging exports and stagnant imports:

“Well, that’s the real mystery here. If this is the world’s strongest major recovery, why are they not importing more from all these countries around the world that badly need to export to it. That’s been the real question… When you look at where the demand is, we are actually seeing very modest demand domestically… If you were seeing this being a true recovery, you’d be seeing more robust domestic demand. You’re not seeing that in our orders data. Your not seeing that in our demand data…”

On surging commodity prices:

“What’s happening right now is a situation that looks a lot more like 2016 where the fundamentals diverged from skyrocketing commodities prices. Where you are seeing that in particular is copper firms and steel firms who are doing worse than the third quarter. They are reporting falling sales, falling income. Their margins are collapsing… Inputs are getting more and more expensive… but you are also seeing a situation where speculators are driving up the prices of these commodities and it’s not reflecting actual demand. The problem with this is you get a situation like early 2016 in which people see this and think underlying stimulus is stronger, underlying growth is stronger… we don’t understand that these are not fundamentals driving the commodity markets at this point…”

On China’s tightening financing conditions:

“(Signs of tightening) are just jumping out of the data in certain parts of the economy… When you look at retail credit data, the loan rejections are the highest numbers we’ve ever seen. It was very difficult for a retailer to get credit in China this quarter. A similar type of dynamic is with SMEs (small and medium sized businesses)…”

On China’s ‘consumer driven’ recovery:

“This has been an overblown story basically for years. But even when you talk about the current recovery… our services data was great this quarter… but if you break open services, you’re looking at the business side of services driving that growth. You’re talking about telecoms and IT, and shipping, and financial services. If you look at the consumer side of this… those sub-sectors are doing much much weaker. It’s a mistake to look at our data, PMI data, and see a high services number and equate that to a return of the Chinese consumer. We’re not seeing that…”

On China’s claim of low inflation:

“If you look what’s happening in official data, they are claiming this booming recovery and yet you’ve got all this talk about the possibility of deflation risk. We’re actually seeing a much healthier inflation atmosphere (as in higher inflation)…”

Despite all of these points, China is going to claim in a few weeks that its economy grew almost as fast this year as it did last year. Even though that claim is patronizingly ridiculous, expect it to get paraded around as more evidence of China’s inexorable rise…

There is more to the interview, so enjoy it above.

Would you like to be notified when we publish a new article on The Sounding Line? Click here to subscribe for free. Also, please consider sharing this article so that we can grow The Sounding Line!

December 29, 2020 Taps Coogan

Post navigation

Ronald Stoeferle: All Fiscal and Monetary Taboos Have Been Broken in 2020 → ← US Rail Traffic Has Been up Year-over-Year Since October
Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

TOP NEWS STORIES

  • Children Have Become a Luxury Item
  • The Bull Case for Oil
  • 2.7 Million People Continually Postpone Their Mortgage Payments
  • Iran & China “Caught Red-Handed” in Illicit Oil Transfer off Indonesia
  • Israeli F-35 Stealth Fighter Spotted in Lebanese Airspace
  • China, US Step up Military Activities near Taiwan
  • China’s Oil Demand at Risk as Millions Scrap New Year Travel
  • In Mass Tech Exodus, Yet Another Firm Is Leaving the Bay Area for Texas
  • After Skyrocketing in Majestic Short Squeeze, GameStop Shares Collapse 54% in Hours: The Zoo Has Gone Nuts
  • Why Gazprom Cut Gas Supply to Europe amid Rising Prices
  • Unique Man-Sized Mayan Mask Found in Mexico
  • There’s About to Be a Big Push to Encourage People to Pay with Their Face
  • The EU-China Investment Agreement Is a Disaster for the West
  • Currency Wars Are Back
  • Ancient Rome Brought Back to Life in 3D
  • US Technological Leadership Is Fragile
  • Kim’s Diplomatic Warriors Defecting One by One
  • Nearly 300 New Lifeforms Discovered Living in Deep-Sea Volcano’s Scalding Jets
  • ‘Aggressive’ Fight over Containers Is Causing Shipping Costs to Rocket by 300%
  • ​China’s Growing Global Stature as Weapons Producer Threatens Russia’s Export Revenues
  • Salmon Spawning for the First Time in 80 Years in the Upper Columbia River
  • Chocolatier Godiva to Close All US Stores
  • Putin’s Alleged Palace
  • More Skirmishes on the India-China Border
  • China Allegedly Surpasses U.S. as Largest Recipient of Foreign Direct Investment During Covid Pandemic
  • Historic Mania in SPACs, IPOs. Huge Fees for Wall Street Banks. Mega Paydays for Insiders. Disdain for Valuations. Blind Faith that “This Time It’s Different”
  • Eurostar Near Collapse, Asks for Bailout, Becomes Hot Potato
  • Canadian Mom Fined for Letting Grandparents Babysit Kids While She Went Grocery Shopping
  • Goldman’s Clients Are Freaking out About a Stock Bubble: Here Is the Bank’s Response
  • Will Venezuela Go to War with Guyana over Oil?
  • Record-Breaking Air Pollution Chokes Central Asia as Cold Snap Sends Coal Use Surging
  • Samsung May Build $10 Billion Foundry in Austin, Texas
  • Personalized Skin Cancer Vaccine Demonstrates Long-Term Effectiveness
  • Dutch Police Arrest Alleged Asian Drug Syndicate Kingpin, One of the Most Wanted Men the World
  • China Goes on PR Offensive After Studies Cast Doubt on Its Vaccines’ Effectiveness
  • Amazon Demands in-Person Union Vote After Arguing Mail-in Ballots ‘Raise Risk of Fraud’
  • Dry Bulk Shipping Revs up After ‘Extraordinarily Bad Decade’
  • Not a Moment too Soon: The Navy Hopes Its New Frigates Will Snap a Twenty Year Streak of Terrible Shipbuilding Decisions
  • China Boosting Naval Footprint at Its Southern Tip, New Satellite Images Suggest
  • China Risks a Himalayan Water War with India
  • Russia Sees Lowest Foreign Investment Since 1994
  • Alberta Demands Direct Compensation from U.S. If Keystone XL Pipeline Canceled
  • Is China Nearing Peak Aluminum After Record 2020 Output?
  • Money Pit: No More Freedom Class Littoral Combat Ships for the Navy Until Major Design Defect Is Fixed
  • Larry King, Broadcasting Giant for Half-Century, Dies at 87
  • China Is Struggling to Keep up with Electricity Demand
  • US May Turn to Namibia for Supplying Strategic Uranium Reserve (If It Doesn’t Get Canceled)
  • Inflation Is Spreading Broadly into the Economy. Amid Surging Costs, Companies Raise Prices, and Customers Pay them, Despite Weak Economy, 10 Million Missing Jobs
  • Ice Covers the Sahara Desert for Just 4th Time in 50 Years
  • Biden Rescinds Trump Order Banning Chinese Involvement In US Power Grid
  • State Department Removes References to China, 5G, Iran Threats from Website
  • EU Parliament Says China Deal Threatens EU Credibility on Human Rights
  • African Scientists Discover Two Dwarf Giraffes So Small, They’re Only a Bit Taller Than a Human
  • Palantir’s God’s-Eye View of Afghanistan
  • Must Read: New China Swine Fever Outbreaks Point to ‘Illicit’ Vaccines Causing New Man-Made Strains

Seach

Categories

Login

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
Copyright © 2020 - TheSoundingLine.com | Please read our full disclaimer and privacy policy before reading any of our content
wpDiscuz