Spotlight on China via Mish

Mike Shedlock (Mish) presents a broad look at the state of China's economic state today:

Reuters reports Global Shipping Downturn Worse Than 2008

November 3
Global shipping is in a downturn even worse than during the 2008 financial crisis, China's transportation minister said on Thursday, with the outlook for the industry made increasingly uncertain by the European debt crisis...

Shanghai Daily reports Hong Kong Home Sales Fall Over 50% in October

November 3
HONG Kong's home sales fell for a 10th straight month, dropping by half in October from a year ago as buyers put off purchases....

This is a prediction but Hong Kong Tips Into Recession, Most Accurate Forecaster Says

November 7
Hong Kong’s economy, a barometer of global growth, probably sank into recession with a contraction in the third quarter, according to Daiwa Capital Markets Ltd. and Australia & New Zealand Banking Group Ltd....

Bloomberg reports China Credit Squeeze Prompts Suicides

Nov 6, 2011
Hours after a creditor and his gang of tattooed thugs hustled Zhong Maojin into a coffee shop in Wenzhou, he says he wouldn’t yield to their demands....

September 29: China Loan Shark Market Crashes; Scores of Chinese Business Owners Unable to Pay Black Market Loans Commit Suicide or Disappear

October 14: Chinese Banks Deteriorate; Loan Sharks Come Knocking; Copper Ponzi Financing Revisited; 5 Reasons to Expect Lower Commodity Prices

Cash Crunch Reported by Ministry of Railways

The Standard reports Rail Authority Faces Dire Cash Crunch

November 7
The Ministry of Railways could be facing a shortfall of up to 800 billion yuan (HK$980 billion), putting many projects on hold, mainland media reported....

Reuters reports Gloomy Outlook for China Exporters as Factory Closure Wave Looms

November 8
Up to a third of Hong Kong's 50,000 or so factories in China could downsize or shut by the end of the year as exporters get hit by cost rises and darkening global demand for Chinese goods, a major Hong Kong industrial body said on Tuesday....

Anyone expecting China to disconnect from a slowing global economy is not thinking clearly, nor are they looking at the increasingly grim facts.

Europe is in recession and Europe is China's biggest export market. The US is slowing as well, just not as rapidly.

Moreover, and as I have reported on numerous occasions, a regime change is coming in China in 2012. That regime change is highly likely to be more focused on an overheating property bubble as well as China's unsustainable dependency on a heavily overbuilt infrastructure model.

Even if the Chinese economy as a whole does not crash, the real estate and infrastructure sectors will. If so, commodity prices will come down, and that in turn will pressure the hard asset currencies of Australia and Canada.

An outright global recession is likely, led by Europe.
... _Mish

Bubbles eventually burst, whether in Europe, North America, Australia, or China.

In order to rejuvenate the global economy, a host of political and economic reforms will be necessary across the developed, emerging, and developing world. Given the general unpopularity of these "tough love" reforms among the parasitic classes in government, academia, the media, and other unproductive institutions, they are not likely to be put into place any time soon. Hence, the likelihood of much more suffering in the future than would be necessary if we would only bit the bullet today.