The fall-off in China’s factory activity may be beyond what Chinese central government officials have admitted so far. Pockets of pessimism have begun to crop up across the country. Zhou Dewen, who runs a lobbying group in the Wenzhou Provence, expressed deep concern, according to the Financial Times. He said China’s economic trouble is deeper than in 2008, which was at the bottom point of the global recession.
Dewen’s comments are the start of a battle between Chinese officials and expert dissenters. China’s official economists continue to insist that GDP improvement will be at least 7.7% this year, with a rise above 8% in 2013. Outsiders and some Chinese businessmen cannot see how this is possible with the recession in Europe and a sharply slowing U.S. economy. These people fairly ask where China’s exports will go and how its factory activity can remain strong with buckling demand among its export partners.
There is no positive response the government can give to that question, unless it plans to buy what some factories yield by itself.
Douglas A. McIntyre
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