rayloke2009blogspot: If Greece weren't enough, check out the problems in China - Smarter Investing

Monday, March 11, 2013

If Greece weren't enough, check out the problems in China - Smarter Investing

If Greece weren't enough, check out the problems in China - Smarter Investing

1 comment:

RAYLOKEMarch 11, 2013 at 5:54 PM
Here are five reasons to be worried:

1) The World Bank is forecasting Chinese gdp to fall to 8.2% in 2012 vs. 9.2% last year. That in turn could depress growth across Asia. The bank sees growth in the East Asia-Pacific region falling to 7.6% this year from 8.2% in 2011--and 10% as recently as 2010.

2) China’s manufacturing sector has hit an air pocket. The closely-watched HSBC Purchasing Managers' Index (PMI) fell to 48.7 from 49.3 in April and has been contracting for some seven months now, according to this BBC report.

3) Slower Chinese growth is dampening global prices for iron ore and coal, a big source of export income for Australia and emerging markets. Iron ore prices recently fell to $144 per metric ton, a low for the year.

4) During the first quarter of 2012, Chinese home prices fell 18 percent. That’s a worry not only for the unlucky consumers who paid inflated prices in recent years, but also mainland banks.

5) One Credit Suisse analyst forecasts Chinese banks could face non-performing loans equivalent to 65% to 100% of their equity in coming years. Bank loans to Chinese real estate developers, manufacturers and local governments may be particularly at risk.
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