Predictably, China’s Year-on-Year Growth Maintains Its Steady Pace
China said on Friday afternoon that it was revising its economic output data to take better account of fast-growing sectors like intellectual property, health care, tourism and so-called emerging industries. But Xing Zhihong, a spokesman for the National Bureau of Statistics, said on Monday morning that this was a continuing project that had not been applied to the second-quarter growth statistics.
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China’s consistent growth also reflects the government’s constant intervention as officials try to reach predetermined targets for the country’s economy — currently 6.5 percent growth or better.
Keep On Lending
The biggest reason the Chinese economy keeps growing quickly is that the state-controlled banking system keeps pouring in loans, although the government began tapering the flow slightly during the second quarter.
Total social financing plus bonds, the broadest measure of credit, expanded 14.7 percent in June compared with the same month a year earlier. In most countries, that would be a breathtaking pace. But in China, it was actually a slight slowdown: Credit was up 15.3 percent in May from a year earlier.
The Communist Party Congress, which is held once every five years and chooses the country’s top leadership, will be in midautumn. So China’s leaders have been eager to keep the economy growing briskly at least until then.
China has many tools for managing a debt buildup. More than half of the credit in its economy consists of loans from state-controlled banks to state-owned enterprises. But Moody’s Investors Service downgraded China’s sovereign debt by a notch on May 24, expressing worry about the broader buildup of credit.
Factories and Services Surge
While a sizable chunk of China’s economy may depend these days on building roads and rail lines into the desert using borrowed money, industrial production and services are also strong.
Steel demand has been vigorous, especially in residential construction. Housing prices have surged in the past 15 months, ever since the government decided during a period of economic weakness in early 2016 to make it much easier for families to borrow for home buying. Some of the biggest cities, like Beijing, have recently tried to curb real estate speculation with administrative limits, but these rules have had limited effect, as credit has stayed plentiful. Overall industrial production rose 7.6 percent in June from a year earlier, the government announced on Monday morning, an unexpectedly faster tempo than May’s 6.5 percent.
Year-on-year growth in retail sales accelerated to 11 percent in June from 10.7 percent in May, while fixed-asset investment also picked up speed in June.
Trade Sustains Economy
Part of China’s economic health in the second quarter reflected robust exports, with demand beginning to recover in Europe and particularly the United States after a long period of depressed growth. But what counts in the overall economy is not the value of the exports but whether the trade surplus narrows or widens. In that respect, there were a few clouds on China’s horizon.
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China’s imports rose 14.5 percent in the second quarter from the same period last year as prices soared for iron ore and other raw materials essential to Chinese manufacturing. Chinese exports rose only 9.1 percent in the second quarter.
The composition of Chinese exports also changed in ways that could intensify trade friction and affect China’s trade surplus. China is becoming even more dependent on exports to the United States, with sales reaching their second-highest level ever last month, trailing only September 2015.
Chinese imports from the United States have also risen, but most of the extra purchases have been oil and other raw materials, which create many fewer jobs than manufacturing.
President Trump promised during his campaign to create more American jobs through a more confrontational approach on trade toward China. But since taking office, he has focused more heavily on addressing North Korea’s nuclear and ballistic missile programs and on very narrow trade talks involving industries like steel manufacturing and beef production. Via: NYTimes
Paradise Papers leak reveals secrets of the world elite’s hidden wealth
The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport who have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires.
The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.
The disclosures will put pressure on world leaders, including Trump and the British prime minister, Theresa May, who have both pledged to curb aggressive tax avoidance schemes.
The publication of this investigation, for which more than 380 journalists have spent a year combing through data that stretches back 70 years, comes at a time of growing global income inequality.
Meanwhile, multinational companies are shifting a growing share of profits offshore – €600bn in the last year alone – the leading economist Gabriel Zucman will reveal in a study to be published later this week.
“Tax havens are one of the key engines of the rise in global inequality,” he said. “As inequality rises, offshore tax evasion is becoming an elite sport.”
At the centre of the leak is Appleby, a law firm with outposts in Bermuda, the Cayman Islands, the British Virgin Islands, the Isle of Man, Jersey and Guernsey. In contrast to Mossack Fonseca, the discredited firm at the centre of last year’s Panama Papers investigation, Appleby prides itself on being a leading member of the “magic circle” of top-ranking offshore service providers.
It acted for the establishment offshore, providing the structures that helped to legally reduce their tax bills.
Appleby says it has investigated all the allegations, and found “there is no evidence of any wrongdoing, either on the part of ourselves or our clients”, adding: “We are a law firm which advises clients on legitimate and lawful ways to conduct their business. We do not tolerate illegal behaviour.”
Prime Minister of Antigua & Barbuda after Irma: ‘Barbuda is barely habitable’
The small Caribbean island of Barbuda was hit by the full force of Hurricane Irma today, and its prime minister reports that there is “a lot of destruction, upwards of 90%.”
Prime Minister Gaston Browne of Barbuda and Antigua “was one of the first on the ground” after the Category 5 storm passed the island. Browne called the damage “unprecedented” and said that after the storm’s 185mph winds hit the community, that “Barbuda is barely habitable.”
During the storm, all communications with the nation were lost for 6 hours, but authorities were hopeful that Barbuda was doing alright, since its sister island Antigua was largely spared from the worst of Irma’s wrath.
At least one Barbuda citizen – an infant – has been reported killed by the storm, with Browne estimating that at least 60% of the population is now homeless. Search and rescue efforts are currently underway.
@abstvradio flying over #barbuda with PM Gaston Brown. Brown said country is rubble..60% of homes destroyed.
Pics courtesy of @abstvradio pic.twitter.com/PZSSPdtoI3
— John Shull (@the_real_shull) September 6, 2017
Sept 6th PM Barbuda Ham Radio Out, Satellite Phone Service Destroyed per PM https://t.co/ObF4ZdF30G pic.twitter.com/aHKnDbobiu
— Northlandfox (@northlandfox) September 6, 2017
As of this writing, Irma has not slowed to a Category 4 and is expected to pass Puerto Rico soon. It is still unknown whether the storm will make landfall in Florida this weekend.
Saudi Arabian Men Are Pulling Car Stunts So Dangerous They Could Kill Themselves
When it comes to entertainment in Saudi Arabia, there isn’t much.
Not only does the Middle Eastern country have a ban on alcohol (meaning no bars), but it doesn’t have any cinemas either. It makes sense, then, that young Saudi Arabian men in their late teens and early 20s are bored and looking for fun, excitement, and even adventure. That’s why some develop dangerous and sometimes deadly hobbies — namely, extreme car drifting.
These men take to the streets and pull insane (not the good kind) stunts at speeds up to 150 miles per hour or more with no regard to other drivers’ safety…
…or for that matter, their own.
Here’s a view of what it looks like from inside the car.