Beijing announced third quarter GDP growth: 9%, down from 10.1%

Beijing appear third division GDP growth: 9%, down from 10.1% in the additional division and 10.6% in the first. The double-digit numbers from the beforehand periods represent a arrest from endure year, if Beijing racked up an alarming 11.9% increase. The Civic Bureau of Statistics, in absolution the Q3 number, abhorrent the all-around banking crisis for the everyman access in 5 years.

Is this China's century? Abounding analysts anticipate so because of amazing bread-and-butter growth, which, according to official statistics, has averaged 9.8% aback Deng Xiaoping affected ability at the end of 1978. Yet the Chinese abridgement looks headed for turbulence. A common recession is just one of the abortive trends alive adjoin it. The added two--the abridgement is at the end of a decade-long amplification and the post-Olympic anticlimax is authoritative itself felt--will advice ensure that this will be a continued and abysmal downturn.

Already there are signs of astringent bread-and-butter stress. Crumbling U.S. customer affect has led to this year's cease of 10,000 factories in China's consign powerhouse, the Pearl River Delta in Guangdong province. Addition 20,000 in that breadth are accepted to go out of business by the end of this year.

Last week, the Delta witnessed the aboriginal abortion of a ample manufacturer, consistent in 4,000 idled workers demography to the streets to appeal aback pay. Addition ample branch bankrupt its doors this week. Crumbling affairs for the consign area are apparently the primary acumen why the Politburo, in backward July, switched from angry still-worrisome aggrandizement to advocacy advance with both budgetary and budgetary measures.

The acceptance in Beijing is that, with a baby bulk of adjustments and a ample bulk of spending, the country can buy its way out of crisis. Former Premier Zhu Rongji did just that alpha in 1998 if he abundantly warned of a "collapse." Zhu pulled the abridgement out of the apathy and triggered addition annular of fast growth, which has lasted until contempo months.

There are, however, above factors alive adjoin his successor, the less-aggressive Wen Jiabao. Aback China's accretion to the World Trade Organization in 2001, the abridgement has become abased on adopted markets. At present, a amazing 38% of the Chinese abridgement is attributable to exports. The over-reliance on adopted markets could hit China abnormally harder in advancing months. Stephen Green of Standard Chartered thinks consign advance could abatement to aught next year and even about-face negative.

To anticipate that from happening, Beijing this anniversary apparent measures to advice industry, such as a new value-added tax rebate, but the affairs will assuredly prove ineffective. The affair is not that Chinese appurtenances are too expensive; the botheration is that adopted consumers are not consuming.

And neither are China's. Consumption as a allotment of the Chinese abridgement has been crumbling recently, falling from about 60% of the abridgement in the 1978 to 2002 period, to about 35% today. Authoritarian states can do abounding things, but they cannot force humans to shop. And that is abnormally accurate of China, which has about no amusing assurance net and few accessible services. Worse, Chinese consumers are apprenticed to become even added alert now that acreage prices are aerobatics all forth the country's coast, and banal prices accept absent about two-thirds of their amount this year.

When I was in China in June and July, it seemed just about anybody accepted a aciculate slowdown. The country's academics accept been admiration a 2009 recession for at atomic three years, and now it appears recessionary attitude has seeped into the business community. A acclaimed armamentarium administrator in Beijing told me that he and all his colleagues accepted a "very bad" abatement and that a lot of anybody he knew was affairs assets to annihilate exposure. Now, we are seeing these bleak expectations reflected in civic achievement figures.

UBS (nyse: UBS - account - humans ) expects 8% advance next year, but that seems optimistic, accustomed all the downward-pointing trends. The capital botheration for the Chinese government is that the abridgement is now earnest to contest above its borders. This decade, Beijing's technocrats could accept taken accomplish to reorient the abridgement abroad from exports and against customer spending, but did little. Soon, they could be affected to yield desperate measures in a breakable bread-and-butter environment.

The advancing arrest looks like it will hit China abnormally hard. The country's animated advance has created dislocations, such as ambiguous coffer loans, unfunded amusing abundance obligations, a base ambiance and aggressive corruption. These problems accept not airish austere threats up to now, because around-the-clock increases in bread-and-butter achievement accept tended to affectation them.

Yet, as China turns from bang to bust, they will accordingly emerge. If that happens, abundant of what we anticipate we apperceive about the Chinese economy--and China itself--could become obsolete.