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Manufacturing in China: already showing signs of success

Chinese industrial companies are experiencing robust profit growth in the first two months of 2017. In January and February, industrial enterprises reported a 31.5% increase in profit from the same period last year, reaching a total value of 1.02 trillion Yuan ($148.5 billion). I strongly believe that, this time, China is serious about it. China Manufacturing 2025 is a real thing and not the usual initiative aimed at pleasing the desire to enhance soft power and find objective to dissuade attention.

China responds to Eurochamber report on Manufacturing 2025

Minister of Industry and Information Technology, Miao Wei, during the National People Congress said that China welcomes foreign companies to compete openly with domestic companies within the framework of CM2025. He said the market is going to play a significant role in company selection and resources allocation. All companies will be treated equally. “Adhere to the government-led, market oriented” is the principle of CM 2025 initiative. Foreign direct investment in the manufacturing industry has peaked in 2011 at 50%, and since then declined to reach 43% in 2015. Worth noticing is how the proportion of foreign direct investment in the service industry has grown substantially over the last five years.

Fiscal review forecast as proxy for GDP growth rate in 2017

According to the annual budget report of the Finance Department of the central province of Hunan, the central government has estimated that national fiscal revenue will increase 5% this year and local government fiscal revenue will increase 6%. Looking at the fiscal budget and in particularly the forecasted increase in revenues, could offer an indication of the government expectation of future nominal GDP growth rate. So from this figures, 6 % of expected fiscal revenue growth, one could try to get an estimate for next year fiscal GDP growth.

China’s January PMI slightly down to 51.3

According to Xinhua, China’s manufacturing sector expands for the sixth month in a row. The country’s manufacturing purchasing managers’ index (PMI) came in at 51.3 in January, 0.1 percentage points lower than that recorded in December, according to data released Wednesday by the National Bureau of Statistics (NBS).
NBS statistician Zhao Qinghe said January’s reading remained at a high level since 2012 and pointed to steady expansion of the manufacturing sector.

China GDP at 6.7%: not even my Excel Solver gets so many numbers right, every quarter

As expected, the GDP grew by 6.7%, down from the 6.9% in 2015. Strong financial expenses and bank debts kept high growth in real estate industry. But Xi warned that Chinese economy is facing downward pressure, where financial risks and industrial overcapacity are top economic challenges. Additionally, the risk of trade war with America is another challenge threatening Chinese economy. In truth GDP growth rate in China is largely irrelevant and rather than being an achievement, it is simply “a budget target “.

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