US slows, China grows

Latest indicators for the US and Chinese economies:

The US Leading Index Falls for a Fourth Consecutive Decline
The Conference Board announced today that the US leading index decreased 0.1 percent...in September, the fourth consecutive decline... However, these declines in the leading index have not been large enough nor have they persisted long enough to signal an end to the current economic expansion... While the leading index is not yet signaling a downturn, the growth rate of the leading index has slowed below its long-term trend growth rate, which is consistent with real GDP continuing to grow in the near term, but more slowly than its long-term trend rate.

The leading index now stands at 115.6.

No major surprise there. In fact, some economists had expected a bigger 0.2 percent fall in the leading index.

China's economy grows by 9.5 percent in first three quarters
China's economy grew by 9.5 percent in the first three quarters of 2004 compared to the same period last year, China's National Bureau of Statistics announced Friday. The NBS did not give a figure for the third quarter. The growth rate was slightly slower than first half growth, which amounted to 9.7 percent.

"In the first three quarters of this year, due to the further enhanced and improved macro-control measures, some unstable and unhealthy factors existing in economic life have been put under control," NBS spokesman Zheng Jingping told a briefing. "The weak links have been enhanced which have avoided big ups and downs in economic life."

Unlike the US, the Chinese authorities want a substantial economic slowdown to avoid overheating. As I point out in "US demand and Chinese production", manufacturing in China has been increasing to absorb the demand in the US. Over the past decade, China has raised its share of the global manufactured export market from 2.2 percent to 5.3 percent. As a result, signs of bottlenecks are already appearing, even in its supposedly-abundant labour market.

If the figures above are supposed to show a successful soft landing, as the NBS is implying, it's not very clear to me.