China’s GDP Continues Collapse
Economic activity in China continues its collapse. Consider the following:
1.Traffic congestion is still 50% below last year’s levels. More importantly it has only increased marginally this week.
2.Small businesses, accounting for 60% of China’s GDP are being devastated. Only 30% of Chinese small businesses are even open according to government and other sources. The one’s that are open
3. For example, according to one recent survey of Beijing restaurants, 69% of restaurants are completely closed. The remaining 31% are operating at below 50% of capacity, on average. Overall revenues are down by more than 80%.
4. Anecdotal accounts, including examination of photos and videos show that commercial activity at shopping malls, stores and other small businesses is down by 50% to 90%.
5. Data released by the China Passenger Car Association (CPCA) shows that passenger car sales slumped 83% in the week February 17 – 23 from a year earlier to a daily average of 5,411 vehicles. The sales in the first two weeks of February tumbled 96%t and 89%, respectively, said the CPCA.
6. Only around 30% of migrant workers, have returned to work. This means that that 25% of China’s workforce is idle. Roughly, an additional 25% of Chinese workers are idle due to various government-imposed restrictions, voluntary restrictions and involuntary unemployment. Thus, roughly 50% of China’s workers are not working.
If it were properly measured, GDP in February would be down by around 50%. Assuming operating rate get up to 90% by the end of March (wildly optimistic) China’s GDP will still be down by more than 30% in March.
Overall, first quarter GDP in China, properly measured will be down by roughly 30%.
Wall Street is still talking about a mere slow-down in growth in China. This is simply a case of economic incompetence.