Spending by Chinese companies down 7% for the year
October 17, 2014 5:14 am
Companies in China are on track to record an annual spending amount 7% below the previous year, reinforcing the occurrence of an economic slowdown.
Based on a Reuters analysis using data from Thomson Reuters Starmine on 334 Chinese companies from industries such as machinery and drug makers, investment is set to fall by 7.3% this year, or $12.1 billion, compared to the amount in 2013. The reduction in spending emphasizes the challenge of the worst economic slowdown the country has faced in 24 years, which is compounded by a weakening property market.
Additional feedback from analysts and companies show that its troubles could deepen further next year due to lingering uncertainty in the economy and the government’s effort to clamp down on heavy polluting industries and those who hold an excess of unsold goods.
Even the largest producer of tin in the world, Yunnan Tin Co Ltd., is seen by analysts to reduce its capital expenses by 81% this year behind the decline in its sales and profits that was brought upon by weakness in China’s economy. The company says that reducing its expenditures is a matter of survival.
A combination of sluggish growth in investments and a downturn in activity levels in the housing market has pushed forecasts for China’s economic expansion in the third quarter to be at the lowest in five years. Analysts surveyed by Reuters predict that China’s economy is likely to have expanded by 7.2% during the period of July to September, the smallest margin since 2009.
The material has been provided by InstaForex Company – www.instaforex.com
Companies in China are on track to record an annual spending amount 7% below the previous year, reinforcing the occurrence of an economic slowdown.
Based on a Reuters analysis using data from Thomson Reuters Starmine on 334 Chinese companies from industries such as machinery and drug makers, investment is set to fall by 7.3% this year, or $12.1 billion, compared to the amount in 2013. The reduction in spending emphasizes the challenge of the worst economic slowdown the country has faced in 24 years, which is compounded by a weakening property market.
Additional feedback from analysts and companies show that its troubles could deepen further next year due to lingering uncertainty in the economy and the government’s effort to clamp down on heavy polluting industries and those who hold an excess of unsold goods.
Even the largest producer of tin in the world, Yunnan Tin Co Ltd., is seen by analysts to reduce its capital expenses by 81% this year behind the decline in its sales and profits that was brought upon by weakness in China’s economy. The company says that reducing its expenditures is a matter of survival.
A combination of sluggish growth in investments and a downturn in activity levels in the housing market has pushed forecasts for China’s economic expansion in the third quarter to be at the lowest in five years. Analysts surveyed by Reuters predict that China’s economy is likely to have expanded by 7.2% during the period of July to September, the smallest margin since 2009.
The material has been provided by InstaForex Company – www.instaforex.com
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