Clearest sign yet of cooling: China auto sales fall for first time over 2 years

[Letsbereal]

China auto sales fall for first time over 2 years
10 May 2011, (AFP)
http://uk.finance.yahoo.com/news/China-auto-sales-fall-first-afp-1948233988.html

Excerpt:

China's auto sales dipped 0.25% in April in their first on-year fall in more than two years, data showed on Tuesday, as the market's explosive growth showed its clearest sign yet of cooling.

A total of 1.55 million units were sold in the country -- the world's top auto market -- last month, the China Association of Automobile Manufacturers (CAAM) said.

The fall prompted CAAM secretary general Dong Yang to warn that auto sales -- forecast to see 10%-15% growth this year -- could in fact grow slower than China's economy as a whole, which is projected to expand by 7%.

April's figure represented the first year-on-year decline since January 2009, when the nation's vehicle sales dropped 14.35% year on year to 735,500 units due to the impact of the global financial crisis.

Sales in April were also down 15.1% from the previous month.

The sales slump could in part be attributed to supply chain disruptions caused by the March earthquake and tsunami in Japan in March, Dong told a news conference in Beijing.

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However, analysts said the market slowdown was mostly due to Beijing cutting off incentives that have been boosting sales.

Sales growth has slowed since mid-2010 as the government began withdrawing stimulus measures aimed at cushioning the impact of the worldwide economic downturn.

The government has raised purchase taxes on small passenger cars to 10% starting this year, ending an incentive that helped the nation overtake the United States as the world's top auto market in 2009.

The only remaining incentive -- a 3,000 yuan ($460) cash subsidy on certain small-engine cars -- will likely end in June, which will add to the pressure on sales, said Zhang Xin, auto analyst at Guotai Junan Securities.

Some cities including Beijing have also introduced measures such as annual quotas on the number of new car licence plates to rein in buying as part of efforts to ease chronic gridlock and air pollution.

Sales rose 5.95% in the first four months of 2011 from the same period a year earlier to 6.53 million units, much slower than the growth rate of more than 32% in the full year of 2010.

[Letsbereal]

Chinese data raise concerns of slowdown
10 May 2011, Hong Kong (MarketWatch)
http://www.marketwatch.com/story/chinas-inflation-eases-but-still-above-forecasts-2011-05-10?pagenumber=1

Excerpt:

Chinese economic data released Wednesday showed consumer inflation moderated slightly in April, though remaining at elevated levels, while industrial output was weaker than forecast, amounting to a mixed picture and spurring concerns of a deepening slowdown.

China’s consumer-price index climbed 5.3% in April from a year earlier, while wholesale inflation climbed 6.8%.

The results compared to analysts’ expectations for rises of 5.2% for the CPI and 7.3% for producer prices, according to a poll by Dow Jones Newswires.

Food prices cooled fractionally from levels in March, but still accounted for 3.5 percentage points of the CPI rise.

The rate, little changed from the 5.4% rise in March, would be viewed as a disappointment after government efforts to cool prices, said Deutsche Bank economist Jun Ma in a note Wednesday.

Still, Ma said he saw no reason for gloom.

‘”These data remain consistent with our soft landing scenario,” Ma said, adding that he expects China’s gross domestic product to grow 8.5% to 9% on an annualized basis in the second half.

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“Slowing activity that is not accompanied by easing inflation raises the prospect that Chinese monetary policy will continue to tighten,” said TD Securities senior strategist Roland Randall in Singapore.

Officials could soon switch from worries over inflation back to concerns of stalling growth, a shift in focus that could be “gaining traction in policy-setting circles,” Randall said.

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“Our general view is that inflation is elevated, but the risk of being out of control is small, while the risk of a hard landing or big growth slowdown is quite low,” said Merrill’s Hong Kong-based analysts Ting Lu and T.J. Bond in a note.