On borrowed time

11 March 2013 By John Foley Follow @johnsfoley

Economic growth so far this year has come mainly from exports and real estate. The latter is powered by a surge in financing, which grew at an annualized 37 pct. With consumption weak, the current expansion can continue only by pumping ever more credit, and risk, into the system.

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Chinese economic data showed strong growth in investment and property development, driven by a steep increase in financing provided to the economy, but offset by retail sales that came in lower than expected.
Urban investment in fixed assets grew 21 percent, in January and February combined, from the same period a year earlier. Real estate investment grew 23 percent, compared with 12 percent annual growth in December, and 16 percent for the whole of 2012.
Total social financing, a measure that includes bank loans and other credit extended by companies and investors, totaled 3.6 trillion yuan ($577 billion) in the first two months of 2012, compared with 2 trillion yuan in the same period a year earlier.
Retail sales grew 12.3 percent year on year, compared with a 15.2 percent increase in December, and the 14.5 percent targeted for the full year by China’s government. Consumer prices rose 3.2 percent in February, a ten-month high.
China reports some data for February and January together, to account for the Chinese New Year festival, which occurs on different dates in different years.

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