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China’s GDP Continues Collapse

February 27, 2020 Premium Preview
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.

Conclusion

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.


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Comments (2)

  1. mitch geiger says:
    March 30, 2020 at 10:40 pm

    Hi James
    I was just billed a minute ago. Unfortunately your site is not for me. Please cancel my subscription. I do not do optiins. Also I find no way to communicate with you, no email, chat box etc. so I found it not possible to request a cancellation. I am using this comment section out of frustration that you have not provided a way to cancel. The information you have above is excellent but I am already familiar with the basic gest that China is lying and Covid is with us for the long run so the economy is tanking.

    Please cancel my subscription at this time and refund my fee. Thank you.

    Mitch Geiger

    Reply
    • Dylan Nertavich says:
      March 31, 2020 at 9:21 am

      Hi Mitch,

      1) You must cancel on Seeking Alpha. Click your profile pic at the top right of Seeking Alpha and go into your subscription settings. All billing issues you have should be addressed through Seeking Alpha. We do not do any billing on our end.
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      Thanks,
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      Reply

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