This may bump China off the radar

A 7.5% GDP growth rate at the world's second-largest economy may be the turning point.

By Jim Cramer Jul 15, 2013 9:27AM

thestreet logoWhat number would get China off the radar screen? At some point we should be saying, "OK, enough already. The commodity stocks are so low, and the producers are cutting back, so -- you know what? We can handle this level." At what number would we say that?

 

I think China may have hit it Sunday night. We got a number, the 7.5% gross domestic product growth number, and it was actually in line. That's right. It didn't disappoint. It didn't take the market down. It didn't cause people to talk wildly about the collapse of China.

It was just there.

 

It didn't upset. It didn't thrill. Irony of ironies, it came when, at last, the lead story of The Wall Street Journal was, "China Slump Ripples Globally."

 

Why does this confluence of data and irony matter? Because I think it might be presenting an inflection point.

 

Go back to Europe. The market used to slump on European news pretty much every day of the week, didn't it? Remember when there were whole periods when every number had been worse than the previous one, and the market freaked out each time? Remember when we would worry about every little piece of data?


China (© Brand X/SuperStock)Then, one day, we got some data and said, "That's not so hot -- but not that much worse than expected." Then we got some "That's almost roughly in line," and then we got some, "Eh, I guess, not so bad." Then we got, "Yeah, it figures."

 

That progression brought stabilization to Europe and to the rest of the world. Go over that litany. At no point did data ever come in "better than expected." We've still only seen a smattering of data that is better than expected out of Europe, but look how high it has gone. It is now in "upside surprise" mode, not downside surprise.

 

That's quite a journey.

 

These days I am not hearing the big gasps out of the China data. On Monday, I actually saw data that initially drove up the Australian dollar, which is sensitive to China. I have watched the Baltic Freight Index go higher for many weeks now, and that was a fabulous leading indicator on the way down. Obviously, the world price of oil is being pulled up by financial buying as a hedge against inflation, but I believe it's also being buoyed by Chinese demand. Of course, that is pretty strong, with an economy growing at 7.5%, as we learned last night

To put it in a nutshell, for about a year now we have been hearing, "Sure, it's bad -- but, when compared with the rest of the world, well, they would kill for that growth." When we hear that, we quickly dismiss it because we know that China's supposed to grow in the double digits.

 

What happens if China doesn't go back to double digits? What happens if we just get, "That's not so hot, but not worse than expected," followed by, "That's roughly in line," and then, "Eh?"

 

We get Europe -- in China.

 

I'll take it!

 

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.

 

 

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98Comments
Jul 15, 2013 9:34AM
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china, being a communist country, releases at best manipulated reports and data.  they can't be trusted.  russia was fine all the way up until they collapsed in the 80's. 
Jul 15, 2013 11:10AM
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China government reporting is done by wiz kid named Sum Ting Wong.
Jul 15, 2013 9:49AM
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Does anyone really believe the 7.5% figure out of China.  Oh well it fits in very well with the Hopium business forecasting that is now our norm.  I think we see QE even become more ignored.  If it doesn't pass the smell test why would you print it Jim?  I'm beginning to get the idea folks are going to flat start ignoring everything as the unbelievable becomes the foundation for planning our future?  Sad and sick.
Jul 15, 2013 1:33PM
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Worst case scenario is the Latin Kings and the Crips fight it out in his home town. Why does the media want to make it a "white thing" we got no dog in this fight.
Jul 15, 2013 1:39PM
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Where is all the mexicans raising he11............ no balls I guess.
Jul 15, 2013 10:23AM
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An interesting take, but we can't forget that nothing has been fixed in Europe.  No systemic problems have even been addressed.  The PIIGS are still in bad shape.  Everything is propped up over there like it is here - interest rates have been artificially suppressed, the central banks are flooding the markets with liquidity and the government spending is out of control.  The main difference between us and Europe is that there is still a remote possibility that we might possibly have a slim chance to grow our way out of at least half of our problems.  There is zero chance of that happening in Europe, especially as long as the EU is still in place.

For those who may be interested, there is a fantastic article by M. Catharine Evans at American Thinker titled "Trayvon's Tragedy: Exploited in Death".  A most excellent read.
Jul 15, 2013 10:20AM
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China-- if China's economy was humming, they wouldn't have whole vacant cities collecting dust and massive warehouses full of stuff they can't export. The whole western portion of China wants nothing to do with the east and is looking at balanced nature and habitat. The east demands an artificial presence that isn't gaining popularity. It is forced. A war in China does global damage. I wouldn't want to be in Shanghai or Hong Kong right now.
Jul 15, 2013 10:39AM
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If the Fed starts QE3 tapering in Sept, 2013 it's going to be negative for China and the EU.
Jul 15, 2013 12:31PM
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"The main difference between us and Europe is that there is still a remote possibility that we might possibly have a slim chance to grow our way out of at least half of our problems."

 

Not as long as the Federal Reserve isn't seized and shut. The only thing not happening that is there is- in Europe they are seizing assets directly from accounts and capping actual cash transactions.  

Jul 15, 2013 1:28PM
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Why do they keep calling Zimmerman white?
Jul 15, 2013 11:45AM
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Hmmmm, A flat day; I was expecting better, and profit taking next week.
Jul 15, 2013 11:20AM
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"Put it in a nutshell"? Bobo .... You couldn't put it in a barrel without a bottom. You're the longest winded bastard I've ever known. Courtesy of John Wayne (The Shootist)
Jul 15, 2013 1:34PM
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My dream for Obama's re-election and second term is being exceeded.
 - Watching Snowden cut his administration's balls off.
 - Watching the Congress do nothing and freeze his agenda.
 - Watching the DOJ be legally powerless to do succeed in prosecuting Zimmerman for neutralizing Obama's surrogate son.

I can safely say --- by voting for Obama, I feel like it counted.

I think I failed to communicate the facetiousness here.   OBAMA IS APPROPRIATELY GETTING POLITICALLY TORTURED


Jul 15, 2013 3:30PM
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China´s economy is tanking. Who believes the 7.5% growth? It´s all lies, here and there.
Jul 15, 2013 2:18PM
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Soetoro

You are missing me COMPLETELY.   Liberal ?   How about classical liberal ?

The so called liberal of today is nothing but a socialist control freak along with his clueless police state conservative counterpart.  The more federal instruments of oppression are disabled by patriots like Snowden, the less means the utopia freaks will have for hegemony. 

Jul 15, 2013 1:22PM
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My investment club"SHARKS" are some modern day Einsteins.Did you ever hear of

him?

Jul 15, 2013 12:19PM
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"A motorcycle racer trying to top 300 mph died Sunday after losing control and zooming off a runway at a former air base in northern Maine." - RIP Bill Warner

 

I hit 200 mph on a hybrid flat track bike in 1979. Only 2 inches of travel in the steering. It took me most of the prior year just to get the steering leaning and contouring down. The suit was way too hot when I came to a stop. At one point you get this weird feeling like you should let go or release your hand or something. You can't, your body is stressing so badly that you can barely adjust to throttling down and even then you struggle to control the bike at all back under say... 40. I dropped three times on the test runs just trying to figure out how to lean turn. There are so many instant calculations and judgments to make at high speed that once you get there you are overwhelmed.

 

The GOP never helped me but really really really dedicated bike mechanics did.

Jul 15, 2013 12:56PM
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The play for the abolishment of the minimum wage by one of the KOCH's now.  All goes along with the framework we have talked about for the last couple years.  The New World Order is well under way.  I guess there are still some out there that believe in Santa Claus and that the political process represents the average Joe.  "We need to remove the minimum wage so the poor can get back to work",  I can see the headlines now, and who made them poor and why? When these folks can get away with paying $3.50 we then will see manufacturing return to the States. Did you see where the same number of Mexican workers are returning to Mexico now as entering.  So there will be more returning to Mexico shortly as our employment picture weakens and then the entire immigration issue becomes moot.  You may find more strength in the peso than the dollar soon.  That might be the best place to hide some dough.  Close by and easily maintained. 
Jul 15, 2013 5:20PM
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We were able to hang in there....Scumbags gave it a run at about 1500 hrs but we survived' we take flat to a bit up any day of the week twice on Mondays....Its only the beginning though folks, manipulators still have 4 more days this week to lie, cheat and steal.
Jul 15, 2013 4:11PM
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Big spender;Barry is from NY.Never got out of that pit.
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