Photo: CFP
Ever since the first half of this year, China's real economy down is always there, fall below the 49.7 August Manufacturing PMI is for the first time. A recent survey from grass-roots in every industry, also clearly shows the current exports and sluggish consumption, manufacturing of the status quo.
Industrial raw materials and consumer goods fall in sales, exports drop sharply
Since its late 2011 grass roots research, only second half of 2012, infrastructure recovery, real estate policy in 2013, lax's "local, intermittent" rebound in economic decline in overall pattern has not changed. First half of 2015, continued pattern of decline, export logistics, stone, industrial lubricants, passenger cars, beverage consumption, these macro associated with high, wide representative research can be seen in the sample.
2015 fell in the first half, compared with the previous three features in the enhanced: the first is exports. Since 2008, although the country's export has been facing internal and external pressure, but in 2015, the most violent, and foreign currencies depreciated cost of Chinese competitive advantage lost, and also will detail later. Second, consumption weakened. Had been considered stable consumption, there have "unstable" phenomenon, the most obvious is the basic consumption of beverages, and examples of optional consumption cars. While consumer differentiation: high-end, low-end consumer good, ends worse. Third, passive investment. This refers to suspended, postponed investment projects, although the data we are seeing investment, but is not active in new investment this year, but for the past 2 or 3 years or even 5 years ago delayed implementation of the investment plan, such as oil and chemical industries. These issues have increased economic concerns in the late.
Sample
International lubricants brand (in addition to the great wall, the Kunlun monopoly, his market share), China sales target by the end of last year downgraded to "negative by 8%" reality 2015 industrial oil sales decline in the first half reflected.
Freight forwarding companies in Xiamen, Xiamen bound for Europe, Hong Kong (such as Hamburg, Rotterdam) week 10-class container ship, 5-6 classes a week in the first half of this year. And some small ports (Southampton), 1 class a week, now going to 2-3 weeks to pass a class because of too little volume, freight forwarders, truck, dump, peers are estimated this volume is ~ 30%.
And this contrast is, according to the Ministry of transport website shows that by the end of August this year, the country today above-scale port throughput increased compared with the previous year 2.8%, port 5.8%, growth has been slow.
Stone shares Bank Financial Division, its customer base is large and medium stone, radiation national market. 15 the first half of its customer base stone sales 30–50 percent down, this does not include the price factor. Think the main cause of national real estate to inventory is not over. 、 Active fiscal policy in August, with significant
A US-funded joint venture brands, market share for passenger cars around. 1% for the first half of 2015 growth, this also includes the updates since 2007 and 2008 first-time car buyers demand. On the product structure, low end less than 150,000 yuan and 300,000 yuan of premium grew slightly, but over 200,000 midrange vehicles drops.
Food and beverage filling and coating business, market share of the top three. 2015 first-half drops to their customers, such as wahaha fell 30%, want want down, jiaduobao down 70% (due to losing a lawsuit), up Wang Lao JI, but jiaduobao + jdb, tanks 7.5 billion last year, only 6 billion this year, herbal tea market is expected to decline as a whole 20%. Tanks with the beer industry overall is down, such as Qingdao declines significantly. Their customers ' few bright spots are: snow rose (for cheap), Budweiser rise (high quality), Red Bull (due to staying up late playing games), but increased by only single digits.
A fruit importer, China imported fruit three port: Guangzhou, Shanghai, and Dalian. Shanghai port 2014 import quality fruits (fruit mangosteen, Durian cherry) 20,000 cabinets (40 ft TEU), and in 2012 the figure is 10,000 cabinets, equivalent to 50% over the past two years, growth is expected in 2015 might be able to 20%--this shows that the high-end consumer is good.
Excessive investment and industry transfer to companies in trouble
Domestic factors
Encouraged by policy stimulus and temporary economic benefits on 2009, enterprises in 2010 and 2011 before and after investing too much, too hard, active stock. Rapid growth in real estate investment in 2010, 33%, 2011 exception making investment by 32% consumption in 2010 increased by inflation 19%, and related investment. Even, there was cross-industry investments, investments, a typical example is real estate and coal.
Many rely on borrowing leverage investment expansion, real estate, high debt ratio in the manufacturing sector, many are formed at that time, rise in 2010 and 2011 civil usury is the product at that time.
Real demand is far better than expected optimistic.
External factors
Tired of global economic growth.
Weaker China factor, global cost pricing system, import prices break the domestic cost of production lines (such as soybeans, oil, coal, iron ore).
Transferring low-end industries to Southeast Asia (labour costs is only 1/5 of mainland of China), China relies on cost-competitive export advantage of irreversible decline (Japan and the Taiwan region has a precedent).
2014, 15 foreign exchange rate depreciation (rubles, Yen, euros, etc) leads to sharp decline in purchasing power abroad.
Sample
Taizhou transformers boss, at the end of 2008 expanding stock from Japan inhaled 4000 secondhand transformer (core components are silicon steel sheet, the new goods sold for 50,000 yuan, thrift to sell 30,000), the equivalent of stockpiled inventory 5-6. However did not expect domestic silicon steel sheet prices have fallen too much, he hoarded the secondhand transformer even 4000 Yuan sold out, falls from 80 million to 200 million yuan in value. Circles by borrowing stock, because of financial pressures, there were 5, 6 to run.
Sea fighter Shanghai district reflect, 2000 years Hou domestic frozen food result of high growth, some dealer earned has tens of millions of, saw industry profitable, on in 2011 before and after wantonly investment into market, dealer himself built factory production, and posted a kitchen sales, but in 2014 years these enterprise almost are pour has, because although industry gross margin has 35%, but marketing costs, and funds cost is high, a district sales 100 million Yuan, at least need 200 million Yuan liquidity plate, dang market needs growth fell to 10 When these problems exposed, many enterprises could not support.
A property developer of industrial transformation of northern Jiangsu, 2009 year, and Government cooperation zone, so supporting get commercial land, land was cheap, three hundred or four hundred Yuan a square meter, looks very large profit margins. But the actual operation, from development to sales has been relying on private funding, a monthly 1.5 minutes, four years works out to nearly 100% of compound interest. Property for all sales completed in the end of 2014, but only received 30% of the first payment, the remaining mortgage loan has been approved. So it is in need of social funds, private capital has not borrowed, lent the trust, 20% costs a year. Final evaluation of the boss, now to break-even, or lost, for working capital. If it still doesn't solve the problem of funds, estimated that even a loss.
Stone Financial Services Department of the joint-stock Bank said before, although stone customer sales declines 30–50 percent this year, but has yet to appear for the main industry closed down cold case, because of the high stone margins, the previous accumulation of the stock thickness. Currently failed mainly because of early foreign investment was so strong, encounter funding pressures, including the end of 14 private lending and arbitrage, 15 UNPROFOR being dragged down in the first half, falling 3% industry's customers about.
A clothing export business in Fujian province, this year from Russia, and Brazil, Europe's currency devaluation effects, orders declined by 20%, price drop 10%, meaning total sales revenue last year fell by 30%. Russia's most serious orders 30%, customer requested price 50% shipment, or simply cancel the production order. He investigated and found, since this round of devaluation of the rouble 50%, but wages have not changed wages just to satisfy a "eat" the most basic needs, Russia was reduced with the usual European business travel, China travel, necessary.
Hunan edible oils business, specializing in vegetable oil, cotton seed oil production and processing, Hunan province, "famous trademark". 2010-11 product prices are up, the company will be capacity expansion from 110,000 tons to 300,000 tons. But then prices fell, loss in its main business in 2013, taking into account the vegetable oil market price has fallen below the 9000 Yuan/ton cost line, think that a low farmers leave types, business owners to cover business losses, confident in the future a long, result lose more and more, facing bankruptcy and liquidation. Reflection, trade in goods under the background of global pricing, current domestic and international price linkage, domestic costs rise over the years, while foreign looks cheap, so that import prices could ruin the domestic line, import makes more sense than domestic production, domestic companies have no profits to speak of. Similar situation arises in the Nonferrous industry, as domestic production costs 13000 Yuan/ton, 15 market price is 12000 Yuan/ton in the first half.
Shanghai, a cloth trader examination of Bangladesh: factory near Dhaka, the capital, workers already reached 5-6000 (domestic private plant of 1000 people, even very large). Regular factory workers a monthly salary equivalent to RBM600 Yuan, and only 400 Yuan. Bangladesh's population of 120 million, now supporting not keeping up, so the products of China's production cycle is 30 days, they must be at least 45 days. But the support is now being followed up. If there are food processing, food machinery facilities now Chinese people have done in the past.
Enterprise risk and capital increase in the risk premium and high financing costs
This round of Central Bank interest rate cut, but research shows that SMEs in the economies of peripheral had little benefit. In addition to the traditional causes of uneven distribution of financial resources, a more important reason is that referred to in the foregoing, enterprises in the exposure period, money lenders require a higher risk premium, and this premium is clearly more than the Central Bank's interest rate cuts.
Research shows that questions on how much banks are not there now, but the problem of lending, even if is the Government, large corporate lending, lending to SMEs "unlimited liability" out. Trade finance businesses (shadow banking) and the client is not a price issue, but "dare can borrow, borrow" problem, because these companies are early stage investment expansion "caught". Private loans or even simply quit quit, taking into account the preservation of cash security problem on their hands. Business, even accounts receivable also requires collateral phenomenon.
Sample
A State-owned trading company, obtained loans from the Bank, then in the form of trade financing for small and medium enterprises financing, the equivalent of "two banks." Reflection since the Central Bank cut interest rates, they get state-owned enterprises, Bank lending rates are falling, but they did not cut its loan interest rates to its customers, is still a monthly 1.2 minutes, years of 14%. Because private enterprises at the periphery, benchmark interest rates too far away from the Center, even a 1% cut, modest compared with the total cost, and is not a major factor in business negotiations. What's more, it is "seller's market", customers who need money, many are too large upfront investment, capital projects, "trapped", need to run mobility supplement, the bargaining power of the weak. The lending policy of the company than they were two years ago, many caution to preserve cash as the paramount consideration.
A district of a stake in Bank of Shanghai Branch, the new credit is lower than in the first half of this year over the same period last year. Amount of last year is not enough problems, and this year the limit is not an issue, is "hoarding" problem has been canceled this year loan index (except for small and micro business loans remains index because in response to policy statements). Loans for small and micro-businesses more to business owners in the form of loans, because this is the "unlimited liability". This round of rate cuts, the Bank loans for small and micro-enterprises have virtually fall in interest rates, remains the benchmark rising above 35%.
Henan city financial Bureau, local financial institutions two main line of business: one is the volume of credit (the equivalent of last year's total of new 30–40% of new credit in June of this year), but mainly for local governments, top 50 best companies to sell loans. Second, risk more cautious, aware that the original "security, mutual protection" is only a secure form, and now it is systemic risk, run run, security mutual insurance simply couldn't resist. Credit now pay more attention to the collateral, collateral from traditional land, plant, extended to the machine equipment, accounts receivable. This round of rate cuts mainly benefit large companies, listed companies, they enjoyed a benchmark. Small business loan interest rate cut a few, Basic 8-10% cost range.
Fujian private lending has been reflected, from 2013 onwards, he and some colleagues have not done lending business. Since 2008 to finance real estate, money can get out soon, immediately even. And the wave of feeling like "trapped", money is hard to come out, yaozhang is difficult. Now stop, unless you have a mortgage, will dare to lend, but often can find banks with a mortgage, you do not need them.
As for SMEs in General, profit margins are low, generally can't afford their higher cost, and could not do. Didn't reflect current enterprise needs are still very short of money, but they do not dare. When private lending collection, 14 part of their funds to the stock distribution in the second half, and a monthly 1.2-1.5 points.
(The author is a senior policy analyst with haitong securities)
Source: weekly financial state
Original title: a civil investigation report tells you how hard the real economy
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