Well folks, I have finally arrived at the end of my China kick, and will give the country, its economy, its politics and its culture (at least as the main focus) a bit of a rest in MetalMiner’s digital pages right after this post.
With all the talk of soft landings for the Chinese economy, this is the last in a series about China’s sociopolitical and socioeconomic shifts and how they could drastically influence how the metals world does business in the next half a century and beyond. Of course, when I say I’ve reached the end, it’s more in the sense of a university commencement the end of something that is, truly, the beginning of something new.
Consider how China stacks up against its large Asian partner to the southwest India:
- Life expectancy in India: 64.4 years. In China: 73.5 years
- Infant mortality rate in India: 50 per 1000. In China: 17 per 1000
- Maternal mortality rate in India: 230 per 100,000 live births. In China: 38 per 100,000
- Mean years of schooling in India: 4.4 years. In China: 7.5 years
- Adult literacy rate in India: 74 percent. In China: 94 percent.
These figures come from the UN and the World Bank, as compiled by Amartya Sen in his article for the New York Review of Books. Sen makes the general point that while India continues to grow its economy in GNP terms, that growth is not yet shown to be helping India’s quality of life. For example, India’s educational system (especially for women), health care sector and ability to amply nourish its children all score lower than China’s. But on the flip side, India’s biggest asset moving forward may be its democratic structure and free media, which is able to avoid the types of authoritarian governmental control and censorship in various sectors that we see in China.
But increased quality of life in India is ultimately predicated on the country’s economic growth, and it is in danger of keeping up its rapid pace. This is the backdrop for the more recent trend of overall economic slump in Asian economies.
India’s economy was expected to grow over 9 percent this year, well on its way to join China territory by breaking 10 percent. Instead, the Q1 2011 tally put growth at 7.8 percent, which is lower than the 8.3 percent rate in the last three months of 2010, and lower still than the year-on-year figure (9.4 percent), according to the Wall Street Journal. (In fact, the WSJ reports, this is the first time that figure fell below 8 percent since the end of 2009.)
China PMI is also down last month, and industrial production in South Korea, Japan, Hong Kong, Singapore and even Europe is down as well. ISM numbers are way down (check out my colleague Lisa’s post on this today.) Auto sales in both India and China have also cooled.
So is it a “soft landing or a “hard landing? The consensus of experts and analysts seem to favor the former, maintaining that what we’re seeing is a temporary cooling period. After all, inflation is at all-time highs in India and China, and central banks are doing their part to rein in rising prices for food and goods. But as manufacturers’ oversupply of inventory begins decreasing again and especially as India and others rebound from their soft landings — look for demand to get stronger the second half of the year and into 2012.