After construction and government spending, the auto industry is one of the biggest sectors of the Chinese economy, playing nearly three times as large a role as exports to the United States.Īn acute shortage of computer chips has separately affected the production and sale of cars in China, muddying the picture.
Truck dealerships across China are now clogged with rows of unsold trucks.Ĭar sales were also weak last month, adding to uncertainty about whether consumer spending will stay strong in China even as Evergrande struggles. Excluding statistical quirks caused by the timing of the Lunar New Year holiday, it was the worst performance for both heavy truck indicators since the spring of 2015, when China was struggling to emerge from a botched currency devaluation.Ĭhina’s freight truck manufacturing capacity has ballooned to 1.6 million trucks a year in a market where long-term sales estimates are far fewer than a million trucks a year. The China Association of Automobile Manufacturers disclosed this month that heavy truck production and heavy truck sales plummeted by nearly half in August from a year earlier.
Alan Greenspan, the former chairman of the Federal Reserve, used to cite the strength of the freight truck manufacturing industry as one of his favorite predictors of the health of the American economy. The measures gauge the production and sale of heavy-duty freight trucks.Ĭonstruction companies and manufacturers all over the world tend to stop buying large trucks when they see trouble ahead. Other questions hovering right now over the Chinese economy can be seen in a handful of measures that might at first glance seem to have little to do with the real estate industry, bond prices or Evergrande’s 1.6 million unfinished apartments. Heavy government spending on new rail lines, highways and other projects is keeping the economy afloat right now, but may not be sustainable through next year. And developers sharply reduced new housing projects over the summer, while rushing to finish the projects they had already started. Industrial production has slackened, particularly for large freight trucks. Retail sales were much weaker than expected last month in China, led by slow car sales. But that murky arrangement doesn’t address the broader threat for Beijing’s top leaders and the global economic outlook: China’s growth is slowing, and the government may have to work harder to rekindle it. BEIJING - Global markets have watched anxiously as a huge and deeply indebted Chinese property company flirts with default, fearing that any collapse could ripple through the international financial system.Ĭhina Evergrande Group, the developer, said on Wednesday that it had reached a deal that might give it some breathing room in the face of a bond payment due the next day.
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