No ‘hard landing’ for China: Ulrich

Jun 22, 2011 | 03:14 PM | Michael Cowden

Tags  China, JPMorgan, Jing Ulrich, steel, SSS, michael cowden

NEW YORK — Recent economic data out of China suggests that its economy may be in for a cooling-off period, but if you put your money on a "hard landing" you may find yourself on the wrong side of the bet, according to Jing Ulrich, one of the financial world’s top experts on China.

Manufacturers’ backlogs may be gradually slipping, purchasing managers are less optimistic than last year and the overall economy is cooling as the government looks to rein in inflation, said Ulrich, managing director and chairwoman of global markets, China, for JPMorgan Chase & Co. But massive spending on infrastructure and continued urbanization—along with China’s strong financial position—should keep any real slowdown from taking hold, she said.

"Concluding a hard-landing scenario from the last few months of softer economic numbers would be very unwise," Ulrich said at the Steel Success Strategies XXVI conference in New York co-sponsored by AMM and World Steel Dynamics Inc.

China remains a "pacesetter" for global growth, and its steel industry—the world’s largest, accounting for 45 percent of global production—is "absolutely critical" to the global steel industry.

Chinese policymakers are engaged in a "complicated juggling act" to maintain economic growth while reining in inflation, Ulrich said.

The property market has shown signs of weakness, she said, which may be of concern to steelmakers as it gobbles up about 50 percent of China’s steelmaking production capacity of some 700 million tonnes per year. Of those 350 million tonnes, around half goes to residential construction, Ulrich said.....

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