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We do have -- shows signs of a slowdown in China manufacturing hit -- nine month's low of corn in the latest survey from HSBC.
Joining the company now is Asia economist Gordon -- -- -- if for some time you've been predicting the coming collapse of China and you use that would collapse.
Is this it.
We're getting very very close Stewart because the economy is now a jury room.
-- B plus one negative one.
This HSBC purchasing managers index really showed not only the direction of the economy which was down but the acceleration -- and that's really the problem right now.
Everybody including me expected premier Wen Jiabao as late spring stimulus to start showing up now July -- August it's not July was very disappointing all this looks like it's gonna be worse.
I thought that there would be a dead cat bounce may be in the fourth quarter of this year.
But now the -- really does look dead and the just spend some Omani stimulate even more -- got a huge foreign as the three trillion dollars -- to spend some of it.
Well there are trying to spend but they don't have money they're really running out of money in China this that got 3.2 four trillion dollars in foreign exchange reserves.
But in a local currency crisis foreign reserves really don't help that much and also got to remember that the central banks foreign reserves.
Are balanced by almost equally by renminbi denominated liabilities they don't have the flexibility to go out and spend that stuff but is this an internal downward spiral in China or is it reflective of an -- -- problem namely Europe in recession slowdown in the US slowdown almost everywhere in the world.
Europe triggered the problems last August and December and that's started showing up in the export belt in China.
But the problems China have -- structural it was going to happen sooner or later -- might not have been Europe but it would have been something else and right now Chinese leaders don't have the same tools that they did in 2008 and 2009 when they did spend a lot of money.
I'm looking at -- headline today front page new all time -- times.
China confronts mounting piles of unsold goods a drag on its economy exports slow but not -- actress problem masked.
In -- This definitely -- -- -- -- agreeing with -- yeah well the data clearly has been wrong for quite some time.
They're talking about seven point 8% growth in the first half.
It probably was closer to one we're probably now -- traction.
-- you that you don't really talk about collapse you talking about a little contraction of the economy may be a recession that's different from Columbus is long term this is structural China's leaders don't have the tools to deal with that.
We're talking about a decade's long trend because the major things that created this 35 years of virtually uninterrupted growth.
Those conditions either no longer exist or disappearing fast he got a political crisis at the same time you all sorts of problems showing up in China converging and that's why it makes this economy so difficult for leaders to deal with -- Gordon Chang.
Thanks so much and I appreciate you being with us again.
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