青草伊伊青青草,亚洲三级在线观看

Hard Landing in 4Q08 The Chinese economy suffered a hard landing in 4Q08. We estimate that China’s GDP growth may have registered negative quarter-on-quarter growth of -1.7% in 4Q08 after a flat quarter in 3Q08 (on a seasonally adjusted, annualized basis). Specifically, while the growth rates of industrial production (value-added) and external trade (both exports and imports) plunged, inflation rates also declined sharply. When discussing China’s economic outlook for 2009 in early December 2008, we argued that three factors had caused the sharp slowdown in the economy. These were (in order of importance): 1) the cooling in real estate investment; 2) a massive de-stocking of raw material inputs in the immediate aftermath of the collapse of international commodity prices; and 3) the slowdown in external demand (see Outlook for 2009: Getting Worse Before Getting Better, December 9, 2008). We think the freefall in activity in 4Q08 was mainly attributable to the massive destocking and severe disruption in trade finance (see China Chartbook: De-leveraging, De-stocking, Disinflation, January 2, 2009). In particular, the latter factor has contributed to a sharp contraction in trade flows due to already weakening external demand. While we were quick to identify the de-stocking as a key reason for the economic slowdown, we underestimated the severe consequences of the disruption in trade finance on trade flows in 4Q08 and the lingering shock impact on the confidence of private investors and households (see Sharper-Than-Expected Slowdown in 3Q08 on De-stocking, October 20, 2008). We think the disruption in trade finance may have had a disproportionately large impact on Emerging Asia. Since the external trade carried out by Emerging Asia tends to concentrate on low-margin links in global valued-added supply chains, it is especially sensitive to the rising costs of trade finance and increased risk perceptions, in our view. Two Inflection Points The latest readings of key indicators have shown some signs that the sharp contraction in underlying economic activity may have eased somewhat in December. This makes some market observers wonder whether the economy is approaching an inflection point. While an inflection point appears to be in sight, it will unlikely be the inflection point envisaged under our original ‘getting worse before getting better’ baseline scenario, in our view. Rather it could be a ‘technical rebound’ from the extreme lows after the undershooting, as de-stocking is expected to run its course and trade finance to normalize (at lower levels compared with pre-crisis highs) in the coming months. A more meaningful inflection point – beyond which a recovery could be sustained – has yet to emerge, in our view. Such an inflection point will likely appear around mid-year as we believe that a sustainable recovery hinges on three factors: 1) the kick-in of the policy stimulus effect in China by mid-year; 2) stabilization of real estate investment; and 3) a tepid recovery in G3 economies by 4Q09. Outlook Downgrade We are downgrading our GDP growth forecast for China to 5.5% from 7.5% previously for 2009 and to 8.0% from 8.5% previously for 2010. This downgrade reflects two specific considerations. First, the shock impact of the economic hard landing in 4Q08 has substantially weakened the confidence of both entrepreneurs and households. While the Entrepreneur Expectation Indicator has fallen to the lowest level since 2000, consumer confidence took another dive in September 2008 after having been broadly stable since the beginning of 2008. In this context, anecdotal evidence suggests that job cuts in the manufacturing and construction industries among migrant workers have been substantial, while wage reductions in other sectors in urban areas have reportedly taken place. Second, our global economics team recently further downgraded the GDP growth forecasts for the US and Euroland in 2009 to -2.4% (from -1.9% previously) and -1.6% (from -1.0% previously), respectively (see US Economics: Global Recession Aggravates the US Downturn, January 12, 2009 by Richard Berner and David Greenlaw; European Economics Chartbook: Cutting Euro Area Growth, Inflation and Interest Rate Forecasts, January 7, 2009 by Elga Bartsch and Carlos Caceres). With an unchanged outlook for the Japanese economy (i.e., -2.0% growth in 2009), these revisions suggest that the average G3 growth rate in 2009 will be about -2.0%. The battered confidence of investors, together with a more challenging external environment, indicates that private capex, especially in export-oriented sectors, will likely be very weak. We are therefore marking down our growth forecasts for manufacturing investment (to 0% from 5% previously), real estate investment (to -12% from -6.0%), consumption (to 6.2% from 7.8% previously) and external trade (to -3.0% from +3.0% for exports and to -5.0% from -4.2% for imports). In our revised forecasts and in terms of contribution to growth, consumption will become a larger driver for growth in 2009, an important shift from the pattern in previous years. The contribution of net exports to growth is unchanged at zero because we expect the growth of imports will slow along with exports as domestic demand weakens. This is also partly a reflection of the import content of private manufacturing investment tending to be higher than that of public investment in infrastructure projects. Getting Much Worse Before Getting Better During 2009 The economy will likely get much worse before getting better over the course of 2009. We expect much weaker headline GDP growth rates in the range of 3.0-3.5%Y in the next two quarters before the economy starts to accelerate from 3Q09 and peak at 9.6%Y by 4Q09. Several factors help explain this rather dramatic profile of quarterly growth rates. At least three fundamental factors cause us to believe that the economy will get much worse in the quarters immediately ahead. First, the shock impact of the economic hard landing in 4Q08 will likely last well beyond 4Q08, as investors turn much more cautious and start to revisit their original capex plans for 2009. Second, our global economics team forecasts the bulk of economic contraction in G3 economies in 2009 will take place in 1H09, suggesting a meaningful recovery in China’s exports will be unlikely until 2H09. Third, while there are tentative signs from the latest data that property sales in a number of cities registered considerable improvement over the past few weeks, the broad downward trend of sales established since early 2008 points to further weakness in real estate investment in the months immediately ahead. At least two fundamental factors lead us to attach a considerable probability to the economy picking up in 2H09. First, we expect the effect of the aggressive policy stimulus to start to show up in an improvement in indicators of real economic activity by mid-year. This view is reflected in the projected acceleration in quarter-on-quarter growth rates in 2H09. Bank lending – a key gauge of the strength of policy responses, be it fiscal or monetary – accelerated sharply in November-December 2008, after the administrative bank lending quota was abolished and the authorities called on the banks to support the government’s effort to revive the economy. It is highly likely that loan growth may have accelerated in January 2009 even from the pace in November-December 2008, in our view. Past experience indicates that bank lending tends to lead investment by five to seven months, suggesting that it takes time for easy credit conditions to translate into an improvement in real economic activity, ceteris paribus. Second, our global economics team expects the growth rate of all G3 economies to bottom in 3Q09 and show a tepid recovery in 4Q09. Stabilization and improvement in the external environment would help boost confidence and bode well for a potential recovery in China’s export growth in 2H09. Besides these economic factors, an important technical one helps explain why headline year-on-year growth rates could turn out to be very low in 1H09 and the potential rebound in 2H09 would only partly be able to offset the growth shortfall in 1H09. China has been consistently delivering rapid growth in past years. If a rapidly expanding economy like China comes to a sudden halt even for a couple of quarters (i.e., registering very low quarter-on-quarter growth rates), this would have a fairly large negative impact on the year-on-year growth rates in subsequent quarters even if the economy were to resume positive growth in these quarters. Risks We also revised our two alternative scenarios – bear and bull cases – to highlight both downside and upside risks to the 2009 outlook for the Chinese economy under our new baseline scenario. Notwithstanding the downgrade to our growth forecast, we continue to believe that the biggest swing factor in gauging the growth outlook in 2009 is real estate investment in China. Under our revised baseline scenario for 2009, we envisage a significant decline of 12% (in real terms) in real estate investment by the private sector. If, however, real estate investment were to collapse and contract by 30% in 2009, the impact would be so big that even the fiscal stimulus package in its current form and size would not be able to make up for the growth shortfall, in our view. We estimate that GDP growth would drop to 3.5% in this event. Under this bear case scenario, consumption growth would likely be significantly lower than under the baseline case, as both employment and income growth would also suffer further setbacks. This bear-case scenario could materialize if property prices were to decline continuously throughout 2009, as it would likely reinforce the buyers’ strike and destroy the investment appetite of real estate developers on a nationwide scale. A potential upside surprise to our baseline growth forecasts may stem from a larger contribution of net exports to growth if the recession in the G3 economies is not as deep as expected and if real estate investment registers only a modest decline. Moreover, a better export performance may also induce positive investment growth in manufacturing. We estimate that China’s GDP growth could reach 7.5% under this bull-case scenario. We assign 65%, 15% and 15% subjective probabilities to the base, bear and bull cases, respectively. Real estate investment is the biggest swing factor among the scenarios. We have argued that there is not a serious nationwide house price bubble (see Can the Property Sector Be Counted on as the Engine of Growth? September 2, 2008). Further, we attribute the slow property sales and price correction to austere measures taken against the property sector that have resulted in a nationwide credit crunch for this sector. It has been less than three months since the government decided to roll back these austere measures, so considerable uncertainty remains regarding when these policy changes could turn sentiment around. Our best judgment is that, while real estate investment will likely register an outright decline from the levels in 2007-08, the probability of a massive collapse in real estate investment on a nationwide scale is small, especially if there were to be additional policy measures to boost this sector (to be discussed below). Real Test in 2010 We forecast 8% GDP growth in 2010. We expect the year-on-year GDP growth rate to start to moderate – after peaking in 4Q09 – over the course of 2010 toward the 6-7%Y range by end-2010; we think that this will likely be the sustainable growth rate for China over the next decade, after the global economy pulls itself out of the potentially deepest recession since WWII in 2010. The deceleration in growth rates over the course of 2010 would reflect the recovery in exports and private investment being partly offset by a smaller fiscal policy stimulus. We are still structurally positive on the Chinese economy over the long run. We believe that the four key secular themes – urbanization, industrialization, globalization and market-oriented economic liberalization – should continue to underpin reasonably strong growth in the long run. And the relative strength of the balance sheet of the economy (e.g., government, banking system, households) should help cushion the impact of the financial turmoil in the short run (see Unscathed from Crisis; Not Immune to Downturn, October 6, 2008). It, however, goes without saying that there is tremendous uncertainty about the outlook for 2010 for the global economy in general and the Chinese economy in particular. First, it is still uncertain whether the G3 economies can successfully stage a decent recovery in 2010, as envisaged under our baseline scenario for the global economy (see Global Economics: Risks to the Global Outlook: The Good, the Bad and the Ugly by Richard Berner and Joachim Fels, December 8, 2008). Second, in the event that the G3 economies were to fail to recover in 2010, this would require an even stronger fiscal policy response from China, if the objective were to deliver 7-8% growth per annum. For instance, if the fiscal deficit in 2009 were to be 3% of GDP, the size of the fiscal stimulus would be 3% of GDP (assuming a balanced budget position in 2008). However, if the same size of fiscal stimulus were to be delivered in 2010, this would entail a fiscal deficit of about 6% of GDP, in our view. At some point, the authorities would have to weigh the benefits of propping up growth through public spending against the attendant fiscal and efficiency costs. Third, prolonged global economic recession could lead to rising protectionism abroad and deviation from the path of market-oriented reform inside China, which may in turn weaken market confidence and delay any meaningful economic recovery in 2010.

※ ※ ※ 本文純屬【serendipity】個人意見，與【鋼之家鋼鐵博客】立場無關(guān).※ ※ ※

上一篇：上市公司八宗“最”[zt]

下一篇：奧巴馬有點緊張(zt)

該日志尚無評論！