Is China's slowdown a boon for others?
Thursday, 7 August 2008
Fazle Rashid from New York
The downturn in global economy in its inexorable march swept through almost all the nations of the world. The economic tsunami arrived late in China. It may have been the other way round. China's economic foundation is so strong that the economic tsunami failed to leave its scar. But finally it has also succumbed The Chinese economy was growing at the phenomenal rate of 11 per cent. Economists expect growth to slip from its pace of 11 per cent or more annually to as low as 9.0 per cent over the coming year, the New York Times reported Tuesday. The Chinese growth rate was a matter of envy for the rest of the world.
China will be put to great difficulty to create jobs for millions who move to the urban areas from the rural areas every year. A slowdown in China's economy has become a boon for others. The price of petrol has dropped because China, the highest consumer of energy, is consuming far less than before.
There has been a plunge in new orders for the factories in China. Export has slowed down due to downturn in economy in the US, the biggest market for the Chinese produce. The sell of apartments is going through a lean patch.
The jolt China received is much milder than those felt around the globe. The demand for copper, tin, zinc and aluminium has dropped leading to the fall in the prices of the metals in the world markets.
The China's principal worry is to control the overheating of the economy and control inflation. The efforts have been to control inflation but, at the same time, to keep the economy moving. Weak demand from the US and Europe is a part of China's emerging problems. The ports are handling less export goods than they did previously. Policy makers have also reportedly moved to ease lending limits on banks.
The timing of the slowdown coinciding with the Summer Olympics which begin on Friday is accidental. But fears are growing that post-Olympic slowdown will take firm roots. Chinese stock prices have fallen by more than half after soaring to record level last October. More broadly, China's enormous investments in new roads, ports, raillines, and other infrastructural activities have started to slow productivity gains enabling it to weather global economic downturn better than most.
But there has been no slowdown in the flow of direct foreign investment. American companies are expanding in China. The economic slowdown is continuing to bite the consumers here in the US. Airlines are charging $1.0 for tea and coffee and $2.0 for a bottle of water. The airlines are also charging for the pillow and blanket.
The airlines said they have been forced to take these unpleasant decisions only to make up the rising cost of fuel. The price of jet fuel has recorded a 71 per cent rise in the past one year. Inflation is intensifying and that is the main source of weakening consumer spending, an economist said high food and energy prices continue to drive overall prices. The oil price has come down to $121 a barrel as demand has slowed down.
The downturn in global economy in its inexorable march swept through almost all the nations of the world. The economic tsunami arrived late in China. It may have been the other way round. China's economic foundation is so strong that the economic tsunami failed to leave its scar. But finally it has also succumbed The Chinese economy was growing at the phenomenal rate of 11 per cent. Economists expect growth to slip from its pace of 11 per cent or more annually to as low as 9.0 per cent over the coming year, the New York Times reported Tuesday. The Chinese growth rate was a matter of envy for the rest of the world.
China will be put to great difficulty to create jobs for millions who move to the urban areas from the rural areas every year. A slowdown in China's economy has become a boon for others. The price of petrol has dropped because China, the highest consumer of energy, is consuming far less than before.
There has been a plunge in new orders for the factories in China. Export has slowed down due to downturn in economy in the US, the biggest market for the Chinese produce. The sell of apartments is going through a lean patch.
The jolt China received is much milder than those felt around the globe. The demand for copper, tin, zinc and aluminium has dropped leading to the fall in the prices of the metals in the world markets.
The China's principal worry is to control the overheating of the economy and control inflation. The efforts have been to control inflation but, at the same time, to keep the economy moving. Weak demand from the US and Europe is a part of China's emerging problems. The ports are handling less export goods than they did previously. Policy makers have also reportedly moved to ease lending limits on banks.
The timing of the slowdown coinciding with the Summer Olympics which begin on Friday is accidental. But fears are growing that post-Olympic slowdown will take firm roots. Chinese stock prices have fallen by more than half after soaring to record level last October. More broadly, China's enormous investments in new roads, ports, raillines, and other infrastructural activities have started to slow productivity gains enabling it to weather global economic downturn better than most.
But there has been no slowdown in the flow of direct foreign investment. American companies are expanding in China. The economic slowdown is continuing to bite the consumers here in the US. Airlines are charging $1.0 for tea and coffee and $2.0 for a bottle of water. The airlines are also charging for the pillow and blanket.
The airlines said they have been forced to take these unpleasant decisions only to make up the rising cost of fuel. The price of jet fuel has recorded a 71 per cent rise in the past one year. Inflation is intensifying and that is the main source of weakening consumer spending, an economist said high food and energy prices continue to drive overall prices. The oil price has come down to $121 a barrel as demand has slowed down.