China’s Manufacturing Purchasing Manager Index (PMI) fell 0.4 percentage points in October to 49.2—any number below 50 represents a contraction in manufacturing production—according to official figures from the National Bureau of Statistics. The data was worse than expected with market analysts expecting a figure of 49.7. This is the second consecutive month the index has indicated a contraction, and is the lowest the index has been since the onset of the pandemic.
Article by Edward Cheng from our premium news partners at The Epoch Times.
Perhaps more worryingly, the data shows signs of stagflation—slow economic growth coupled with accelerating inflation. Driven by increases in commodity prices, the sub-index for output prices rose to 61.1, its highest level since 2016. But at the same time, a lack of demand is driving the contraction in production. The combination of high inflation and weak consumer demand could create a vicious negative feedback loop.
“About one-third of the surveyed companies listed insufficient demand as their biggest difficulty, indicating inadequate demand had restricted their production,” said Zhang Liqun, an analyst at the China Logistics Information Center, told Reuters.
But this is only the most recent data point in a series of negative economic news coming out of China. The world’s second-largest economy is unambiguously stuttering, leaving the authorities stuck in a bind as they attempt to navigate long-term goals with short-term needs.
Broader Economic Decline
The manufacturing numbers only serve to reinforce the disappointing gross domestic product numbers published last month. The National Bureau of Statistics reported that the country’s economy grew by only 4.9 percent in the third quarter, slowing from 7.9 percent in the second quarter.
Power outages have been a core headwind to Chinese economic activity. The energy crunch has been driven by a variety of factors that have colluded to cripple the country’s power sector.
Demand for energy has been unusually high, driven by unseasonably cold temperatures and high demand for Chinese goods from other countries as they have exited the pandemic.
But as energy demand has increased, supply had been restrained by the authorities. China removed a valuable source of imported coal when it cut coal purchases from Australia at the end of 2020, a move critics say was aimed at punishing the country for calling for an investigation into the pandemic origins. Meanwhile, the Chinese Communist Party’s carbon-neutral targets have led to lower domestic coal production. Moreover, government regulation capping electricity prices has meant power plants have not responded to these forces. These forces have resulted in a self-inflicted surge in energy prices and energy rationing across the country, stunting economic activity.
To compound the issue, even with the slowing production the global shipping crisis has meant Chinese manufacturers have not been able to capitalize on high global demand for their products.
“It is clear that economic momentum is slowing quickly and supply chain pressures are compounding this weakness,” wrote Mitul Kotecha, chief emerging markets Asia and Europe strategist at TD Securities, in a Nov. 1 research note.
Though power shortages and supply chain issues are unlikely to be a long-running headwind on the economy, one cannot ignore how sensitive China’s economy has been to these developments.
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Ongoing Property Market Decline
Perhaps most worryingly is the property market, which has continued to slide and shows little sign of abating.
Low consumer demand, high leverage, and regulatory hurdles have seen a string of Chinese property developers, most notably Evergrande, run into liquidity and debt troubles. And these troubles likely run deeper than just a few firms. Bloomberg reports that two-thirds of China’s top developers have breached at least one of the “three red lines,” a series of regulatory interventions designed to deleverage the industry.
Consumers have understandably become cautious in the face of all these debt troubles. According to property research firm China Real Estate Information Corp., new-home sales for the top 100 developers fell by 32 percent year-on-year in October. As new-home sales dry up, this will amplify any liquidity concerns faced by property developers.
With property accounting for around 25 percent of China’s economic activity and a substantial portion of assets held by households, the slide in the property market will undoubtedly weigh heavily on growth.
Adding to the economic headwinds, China has continued to enforce a stringent Covid-zero strategy. Outbreaks are still met with heavy-handed and disruptive lockdowns, with the retail sector being particularly sensitive to these measures. With the authorities showing no signs of changing their strategy, further disruptions to consumer spending and production will undoubtedly occur.
Image via Quartz.
Will America-First News Outlets Make it to 2023?
Things are looking grim for conservative and populist news sites.
There’s something happening behind the scenes at several popular conservative news outlets. 2021 was bad, but 2022 is proving to be disastrous for news sites that aren’t “playing ball” with the corporate media narrative. It’s being said that advertisers are cracking down, forcing some of the biggest ad networks like Google and Yahoo to pull their inventory from conservative outlets. This has had two major effects. First, it has cooled most conservative outlets from discussing “taboo” topics like Pandemic Panic Theater, voter fraud, or The Great Reset. Second, it has isolated those ad networks that aren’t playing ball.
Certain topics are anathema for most ad networks. Speaking out against vaccines or vaccine mandates is a certain path to being demonetized. Highlighting voter fraud in the 2020 and future elections is another instant advertising death penalty. Throw in truthful stories about climate change hysteria, Critical Race Theory, and the border crisis and it’s easy to understand how difficult it is for America-First news outlets to spread the facts, share conservative opinions, and still pay the bills.
Without naming names, I have been told of several news outlets who have been forced to either consolidate with larger organizations or who have backed down on covering certain topics out of fear of being “canceled” by the ad networks. I get it. This is a business for many of us and it’s not very profitable. Those of us who do this for a living are often barely squeaking by, so loss of additional revenue can often mean being forced to make cuts. That means not being able to cover the topics properly. Its a Catch-22: Tell the truth and lose the money necessary to keep telling the truth, or avoid the truth and make enough money to survive. Those who have chosen survival simply aren’t able to spread the truth properly.
We will never avoid the truth. The Lord will provide if it is His will. Our job is simply to share the facts, spread the Gospel, and educate as many Americans as possible while exposing the forces of evil.
To those who have the means, we ask that you please donate. We have options available now, but there is no telling when those options will cancel us. We have our GivingFuel page. There have been many who have been canceled by PayPal, but for now it’s still an option. Your generosity is what keeps these sites running and allows us to get the truth to the masses. We’ve had great success in growing but we know we can do more with your assistance.
Thank you, and God Bless!
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