Andy Xie of Morgan Stanley sees signs of a slowdown in China.
Declining commodity prices and property sales have decreased corporate cash flows. In response, corporates are putting the brakes on their on-going investment projects. This typically represents the first stage of slowdown following an investment-led boom.
Decelerating energy consumption and rising inventories are the visible signs of the slowdown. The dramatic decline in China's imports of petroleum reflects both slowing energy demand in general and the growing availability of coal...
Following the central government's introduction of anti-speculation policies in the spring, speculative demand in the property market has dried up...
He sees a silver lining though.
As the economy slows, adjustments in the property market and vanishing bottlenecks should redistribute more income to the household sector through declining prices. This should benefit the low-income group especially. This dynamic suggests that the coming economic slowdown should benefit social stability, in our view.
A clear slowdown in the Chinese economy would also help cool speculative pressure on the renminbi to revalue further. Ben Carliner has more on the latter at Cynic's Delight.
A cooling China does seem to be getting to be a hot topic. Carliner refers to Survived SARS, which has a post on deflation in China and which refers to this and this report.