Sunday, September 25, 2011
China's Manufacturing Slows as U.S., Europe Stall
This is an interesting article that explains China's roll in the sick global economy. The sluggish US and European economies have reduced China's net exports. Consequently, China's manufacturing sector has constricted in recent months due to the decrease in demand from the US and European markets. At this point, the main thing that is keeping China's growth above 8%, the rate that is needed to produce enough jobs for the growing population, is there population. Domestic demand has supported this beast of an economy though the dip in foreign demand, but inflation has become a problem. An economist described China as "stuck between a rock and a hard place." They need huge annual growth to support their job market, but with this growth come inflation.
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It is not surpring that China's manufactoring production has been influenced by the global economic depression. Since there is no closed economy in reality.
ReplyDeleteAs talked in this article, with the reduced net exports, huge amount of needs for jobs, depression in local stock market, increasing inflation rate, China is facing a lot of pressure. Especially things may be getting worse in the future.
Actually I think the situation will be more serious for the Chinese government than other states, since the pressue from economy could easily transfer to political crisis nowadays.
This makes sense though the US and European economies are not doing that well therefore they don't have enough money to buy goods from China. That's why China's export decreases. China biggest GDP comes from export. They depend on it.
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