A slew of data releases are now pointing to a Chinese slow-down. This from the WSJ:
“After running huge trade surpluses for more than a decade, which powered growth at home and complaints abroad of unfair trading practices, China’s trade sector fell deeply into the red last month, raising questions about whether China’s economy is tailing off more rapidly than anticipated.
The weekend report of a $31.5 billion trade deficit for February was substantially larger than most analysts expected and followed a string of other disappointing economic data, including weak growth in car sales, industrial production and retail sales, and the continuation of a steep fall in property sales. The only bright economic star was that inflation slackened more rapidly than expected.”
As a result calls for more supportive policy are gaining momentum. China remains one of the few strong legs in the global economy so a persistent slow-down remains a substantial risk to the global economy….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
This is also proved by economic models. Growth rates are high when the base is low but it slows down as the economy gets bigger.GDP growth at the root is two factors, more labor hours and productivity increase. When China opened up itself, labor participation grew in the export market and those earnings were invested in domestic infra which added productivity gains and contributed to domestic consumption turbocharging the growth. After two decades of this phenomenon, productivity gain is hard to come by. read more about china economy , culture , food visit The China Magazine
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