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CRN: The Chinese Economy Faces Its Biggest Adjustment

China Review News (CRN) recently published an article analyzing the direction in which the Chinese economy is moving. The article expressed the belief that, based on the numbers from the first month of the third quarter, the Chinese economy shows no sign of having any hope in the near term. The official July PMI (Purchasing Managers Index) reached a new low for the past eight months. Export growth is now down to 1%. GDP growth slipped to 7.6%, which represents a slowdown for the last six consecutive quarters. The author suggested that the structure of the Chinese economy is heavily distorted. For example, government investment contributes to over 50% of the GDP; consumer spending is constantly on the decline; by the end of 2010, local government debts had reached RMB 10 trillion. Meanwhile, over the last 10 years, the domestic supply of the Chinese currency to the market increased 600%. The author concluded that the Chinese economy is quickly approaching the point of a total breakdown, which will reflect the combination of all the accumulated risks it has taken in the past several years. 
Source: China Review News, August 24, 2012