Friday’s China Links

From the Wall Street Journal, an illustrated guide to the zero growth Chinese economy.  Please explain to me how declining rail freight traffic in China and electricity growth clocking in recently a zero and 5% growth officially tells of an economy growing at 7.5%?

I love Chinese government double speak.  Yesterday, Beijing said it would urge “local governments…to speed up spending this year’s budget to support economic but said it would keep overall policy stable…”.  Two questions.  What happens if local governments speed up spending this years local budget near the end of the year and policy has stayed stable?  That must mean no more KTV for the local government or flour used in highways construction projects.  Didn’t you just say something about being concerned about the growth in credit and not knowing how much debt local governments have?  Pay no attention to the Central Planner behind the curtain.

Not that international trade policy is ever all that rational but this seems to be a cutting off your nose to spite your face move.  China, the European Union, and the United States are all involved in various trade disputes about solar panels, the base materials, and components.  The US and the EU have imposed anti-dumping duties on Chinese solar panels and China decided turnabout was fair play.  Since China has no value by imposing punitive duties on US or EU solar panels due to market share size, they decided to levy punitive duties on the high grade silicon used to make solar panels.  The only problem?  China imports more than 80% of its high grade silicon that it puts into solar panels from the US.  In other words, China just increased the cost of the primary input of an industry struggling from massive excess capacity and anti-dumping duties from its biggest customers.