What? Did they have bad weather too? OK, bad joke. The mention of China’s GDP growth missing its 7.5% target is the joke, because the 7.5% number is mostly made up. For example, part of their GDP growth is based on a huge building program that has increased housing in the cities. Now those real estate complexes stand vacant. In a State-run economy, can constructing buildings that do not satisfy an actual need be considered a positive for GDP? I say no. It is similar to the over building in the rest of the world from 2004 until the 2007/8 crash. The rest of the world paid dearly. China’s problems may be a continuation of those problems as well as an indicator that word demand is slowing.
The Chicago Fed reported that national economic activity increased in February, but it’s the above slowing in March reported by the private firm Markit in the preliminary PMI that is concerning. There should be pent up demand as a result of bad weather in January and February. March should be accelerating.