China Regaining Business Confidence. Cars to Follow Next July
It’s a strange world. In the past, when China’s economy was down, most of the world (at least silently) cheered. Now, as China’s growth slows, the world gets worried. Suddenly, it’s news when China’s auto sales fall 10 percent in November. Suddenly, the world gets alarmed when for next year, growth rates of only 5 percent are being projected. Yet, China may be out of the slump much faster than many think, or some still silently hope.
Business Week predicts that in the second quarter of 2009, “the benefits of China’s massive $582 billion stimulus package could start to flow through, and the economy could kick into a higher gear once again.” The signs are everywhere, says Business Week.
China’s stock market had been going down for all of the year. Suddenly, the market is up sharply. Even the battered Chinese housing market shows sign of new life. In Shanghai, sales volume sales jumped 47 percent in November. In the rest of China, there was also movement. Prices are lower, but inventory starts to move again. In this strange world, people are getting giddy about something that would have worried them before: Rising steel prices. Merrill Lynch economists Ting Lu and T.J. Bond noted an “especially eye-catching” rise in steel prices after a 60 percent drop since summer. “The turnaround in steel prices may suggest that business confidence has to some extent returned,” the duo writes.
As business confidence comes back, people will be buying cars again. Now we understand why China’s Association of Automobile Manufacturers was so specific when they prognosticated a “recovery in July 2009.” That’s when the Chinese government thinks their economy will be rocking and rolling again, and Business Week seems to agree. China will be back to its old role of saving the worldwide numbers of the auto industry. A strange world sure it is.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Menno, if there's another New Madrid Earthquake like back in 1811-1812 http://en.wikipedia.org/wiki/New_Madrid_Earthquake it'll ruin our whole day. At least.
Correctomundo, 50merc. The substance of the earth under foot in flyover country is much denser than California, apparently, and a big quake in the New Madrid fault would be catastrophic for about a 500 mile radius, where literally millions of people live. The shock waves would travel far larger distances than in California, I understand. More than a potential bucket load of not good. Worst case scenario would see major cities such as St. Louis and Louisville, Nashville, Memphis, Little Rock - with major damage. Buildings there are not constructed to handle 6.5 quakes.