Monday, 2 May 2011

China's economy slowing

China's economic growth may be slowing. From AFP/CNA today:

Manufacturing activity in China slowed slightly in April and the costs of raw materials fell, according to official data released Sunday, as Beijing tries to cool the world's second-largest economy.

The purchasing managers index (PMI) slipped to 52.9 in April from 53.4 in March, the China Federation of Logistics and Purchasing said in a statement.

However, there is a longer-term slowing of the Chinese economy that will take place in coming years as a result of demographics. From Bloomberg last week:

China declared victory over rapid population growth as the release of its decennial census signaled the focus will turn to managing the impact of a faster- than-expected rise in the number of older people.

China had 1.34 billion people as of Nov. 1, the Beijing- based National Bureau of Statistics said yesterday. While still the most populous country, the higher birth rate of India’s 1.2 billion people puts it on course to take the title when the South Asian nation holds its next census in 2021...

“The working age population is due to start falling within the next three or four years,” said Jim Walker, managing director at Hong Kong-based Asianomics Ltd. and former chief economist at CLSA Asia-Pacific Markets. “These 9, 10 percent growth rates people have become accustomed to are not sustainable for very much longer.”

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