Is China stalling or growing?

It seems there are 2 Chinas. We hear about it imploding, but we also hear otherwise on some companies' calls.

By Jim Cramer Jul 31, 2013 9:34AM

thestreet logoThere are two Chinas. There is the China we hear is imploding by the hour, and then there's the China we hear about on the conference calls.

 

Just Tuesday we heard from Cummins (CMI) and from Chart Industries (GTLS) and they joined the endless parade -- save Caterpillar (CAT) -- that says there's a ton of business to be had in China and they are spending like crazy. Truck orders for Cummins were really strong. Orders for equipment to turn natural gas into a liquid fuel are booming. It's almost other-worldly.

How can you explain it? I think a lot of it has to do with pollution, and trying to stop it. I think the Chinese government may not know how to stimulate effectively, but I think it is trying to get a handle on noxious gases and to get away from diesel fuel by using natural gas and is adopting it much faster than we are. But, of course. We have no energy policy at all.

 

China (© Brand X/SuperStock)Now, let me make this clear. You order new Cummins engines, you cut pollution back tremendously and trucks emit a ton of pollution. But if you really wanted to cut back pollution you wouldn't be opening new coal plants every other week, even if you claim that some of the technology allows for cleaner-burning coal. You wouldn't be polluting the air with an endless parade of smelters that wouldn't be allowed to be open anywhere else in the world. You wouldn't be producing too much of everything that's needed for commercial building and then flood the stuff to take our jobs away.

But when it comes to fuel, they are anxious to get away from OPEC and anxious to make the air cleaner in part because 1 million people will die from respiratory illnesses this year in China and that's enough to create a revolution if it keeps up.

 

Still, the orders keep coming through for companies and the business is still the best in the world for most of the industrial companies I deal with. Don't want to own China. Just pointing it out.

 

 cramer

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.  

 

 


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14Comments
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I just wish the world would wake up to the fact that we've been 'conditioned' to believe that it's better to buy 20 things made in China, for 1 dollar each, that last maybe 1 day of actual use, as opposed to buying 1 thing made almost anywhere else, for 10 dollars that lasts years.

 

Ultimately we've forgotten that 'long term' saving by paying a bit more for quality up front is saving more than 'short term' saving by buying extremely cheaply (and getting, at best, what you paid for) and having to endlessly replace that 'cheap' item...

Jul 31, 2013 10:59AM
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Forgetting about China for a minute...

We need rebuilds on roads and bridges here..

Along with our power grids..

And then most important, energy independence; Which includes pipelines, better rails, refineries and exploration with discovery.

With a long term "green energy" plan to compliment our lives and not complicate them.

 

All the above bolster Cummins, Cat, Deere and GE, along with others and provides jobs.

Congress, the Administration have to remove their heads from their azzes, wipe the brown stuff off their faces and move forward...

Forget about Wars and saving all the other Countries in the World, save us first...!!

The rest will all fall into place....In most cases, it has in the past. 

Jul 31, 2013 11:25AM
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Finally a game plan most everyone will accept and rejoice over. 

Forget about Wars and saving all the other Countries in the World, save us first...!!

The rest will all fall into place....In most cases, it has in the past. 

You are on to something here Togs.  Imagine doing something to help that forgotten little American. A very novel but sound idea. 
Jul 31, 2013 9:50AM
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Cummins and Caterpillar have a lot to gain in China.  as long as they need to build roads and bridges, expect those guys (and deere, Ingersoll, case, jcb) to do well there. 

 

China can't be so stupid to ignore ALL of the upgrades in pollution the world has seen the past few decades. 

 

but don't confuse roads and bridges with full on country growth.  one can be growing while another is floundering.  perhaps they are using their infrastructure as a public stimulus? 

 

cummings and cat have a great future there.  however the rest of the country will soon reach a stage where it'll be up to it's eyeballs just supplying material for themselves, much less the rest of the world. 

 

i expect social upheaval there soon - like in 10 years

Jul 31, 2013 10:59AM
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The United States was creative before the GDP change and will be creative after the GDP change. It's really not that big of deal either way. The Bigger Deal is Uncle Ben and the Global FEDS printing Trillions. The Biggest Deal are the 500-700 Trillion in Scam Derivatives still floating around the Globe.

They also actually revised the last GDP figure down from 1.8 to 1.1 so if it was all about making the numbers look better, explain that. Folks sometimes get far too lost in GDP numbers, China's numbers have always been phony as have ours. Nothing new to see here. After all, it was the Creative Big Banks doing this type of bogus accounting for Decades.

Jul 31, 2013 10:19AM
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Perhaps China is as obtuse and creative with their "statistics" as the US guberment.  Have you noticed the latest footnotes to the Growth numbers. 

"The government has implemented some changes in how it calculates GDP. For example, research and development spending will now be treated as investment, and defined benefit pension plans will be measured on an accrual basis, rather than as cash."

REVISIONS

"Adding to the better tenor of the report, comprehensive revisions to the data cast the economy in a better light than previously."  For the most part our game is being played in the dark, and if there are numbers the guberment minders don't like they change the format.  I guess many folks see confusion as a challenge or a way to avoid boredom.  First move the goal posts while the lights are on then if required move them with the lights out.  It is like they have home field advantage for every game.  Silly sometimes wouldn't you agree. So to answer Jims' query.   Who knows what is really going on in China.

Jul 31, 2013 6:29PM
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What did the Fed say that we weren't expecting? Nothing....We do not mind a flat to to a bit up day any day of the week but today the Dow should have been up triple digits, the S&P about 10-12 and the Nasdaq 20-25 points, easy.....However, and there is always a however, manipulators did not let it happen; they started doing their thing at about 1530 hrs and we are lucky we ended the day the way we did, could have been a lot worse....Again folks, when these cheating crooks take over, there is very little anyone can do....Oh well, let see what happens tomorrow.
Jul 31, 2013 12:46PM
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Day Two of-- Let's see if I can keep getting paid to write stupid articles. Where is your article about the Federal Reserve pumping the markets today to ensure July finishes according the Ben Bernanke not anything remotely resembling the TRUE economy?
Jul 31, 2013 12:32PM
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We call it as we see it folks, that's why warned this morning at about 1030 hrs when we hit triple digits...Too many manipulators ready to do their thing and the Fed this afternoon...Everyone knows that is not what the Fed says but how these scumbags "interpret" his remarks....That's Wall Street people....Half of the gains given back already...Anyone surprised? Think not...More later.
Jul 31, 2013 11:48AM
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Just keep on building those ghost cities and China will never have a down GDP number...
Jul 31, 2013 12:38PM
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Every full time working American owes 150,000 in government debt. Of that debt, each working American owes China $14,000.  Cramer, China is our new Master Card and I wonder who owns who?
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