Chinese Economy Faces Decline, Leading Financial Newsletter Profit Confidential Reports

Michael Lombardi, lead contributor to Profit Confidential, believes that Chinese corporations are facing declining corporate profits, which is one of the main reasons why the Chinese economy’s main stock market, the Shanghai Composite Index, is down 17% from a year ago.

In the article “Chinese Economy Shows Signs of Severe Slowdown,” Lombardi notes that the world’s second-largest airline, Air China, warned that its corporate profits would decline by more than 50% this year.

Lombardi also observes a decline in cellular phone sales: “At one time, it seemed every Chinese consumer was buying a cellular phone in the Chinese economy,” says Lombardi, “but this year, two of China’s largest manufacturers of cellular equipment reported drops in corporate profits of over 12%.”

Lombardi believes there is more evidence that the Chinese consumer within the Chinese economy is not going to help global growth.

“China’s largest electronics retailer reported corporate profits that fell almost 30%,” says Lombardi. “China’s second-largest appliance maker saw corporate profits fall by 30% due to slowing demand.”

In total, Lombardi cites roughly 900 large firms within the Chinese economy are expecting lower corporate profits for 2012.

“This is why, despite the People’s Bank of China pumping 1.4 trillion yuan into the Chinese economy; bank lending continues to fall,” states Lombardi.

If the Chinese economy does crash to a halt, Lombardi thinks this will create reverberations around the world and will cause significant damage to the U.S. economy.

Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market…before it plunged.

Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.

To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.

Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit www.profitconfidential.com.

Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.