Chinese President Xi Jinping stated the obvious. "The Chinese economy is a concern for everyone," he said. "We will work hard to shift our growth from just expanding scale to improving its structure."
What he means is that China's economic deceleration -- the official growth rate of 6.9 percent is a six-year low -- is the sign of an economy in transition. It's moving from an over-reliance on exports and government-led investment to an economy that is more consumer-led.
So how's that going? First the bad news: The industrial goods-producing sector of the Chinese economy is in recession and likely to remain there for at least another year.
Now the good news: The domestic-oriented service sector is likely to keep growing at low, double-digit rates -- and that should result in real GDP growth of 4 percent to 5 percent.
Until recently, China's economy grew rapidly, thanks to a booming manufacturing sector that imported raw materials and equipment to produce goods that were exported to North America and Europe. Slow growth in the developed world, however, put an end to that ploy.
China's other stimulus, infrastructure investment, resulted in ghost cities and a pile of debt now totaling 208 percent of gross domestic product. Together, the debt overhang and excess capacity will limit future growth.
Now, exports are declining after decades of 20 percent annual growth. An earlier housing boom, driven by aggressive bank lending in response to the 2007-2009 recession, has been followed by a decline in construction. Growth in capital investment continues to slow. The industrial sector’s growth rate plummeted from a 22 percent annual rate in the second quarter of 2007 to a mere 0.2 percent in the third quarter of this year.
Actually laying up isn't bad, trimming and fitting is miserable, itchy, work, and fairing painful drudgery.
