More Related Content

Recently uploaded(20)


How Dependent is the Chinese Economy on Exports?

  1. How Dependent is the Chinese Economy on Exports? By
  2. exports Weak Chinese trade data sent stocks down across the globe.
  3. exports According to The Wall Street Journal U.S. stocks were hit after the opening but pared their losses later in the day.
  4. exports Before We Continue… Click the links below to get your FREE training materials. Free Weekly Investing Webinars Don’t miss these free training events! Forex Conspiracy Report Read every word of this report! Get 12 Free Japanese Candlestick Videos Includes training for all 12 major candlestick signals.
  5. exports The Dow Jones Industrial Average closed little changed Thursday, nearly recovering from an earlier 184-point drop that followed weak Chinese trade data.
  6. exports Official data released Thursday showed Chinese exports fell 10% year-over-year last month, sparking concerns about the world’s second-largest economy and global demand.
  7. exports Stocks around the globe fell and base metals such as copper tumbled.
  8. exports Investors moved to safe havens such as gold, U.S. government bonds and utility stocks.
  9. exports There are two aspects to this news. First is that if China exports fall it consumes fewer raw materials, buys fewer high tech equipment from Japan, Germany and the U.S.A. and consequently drives affected stocks down across the globe.
  10. exports The second thing is that China’s economy is slowing down because its economic growth was based on exponential growth of its export market.
  11. exports But the world is only so big and there is not a lot of room for the Chinese export market to grow, especially in a world that that is still slowly recovering in fits and starts from the Great Recession.
  12. exports Considering that China has become a cog in the global economic economy how dependent is the Chinese economy on exports and is there a way to fix that?
  13. exports Consumer Driven Economic Growth
  14. exports Japan appeared set to take over the world economically at the end of the 1980’s until a mountain of bad debt came to light.
  15. exports Now a nation of savers and exporters is into its third decade of economic doldrums.
  16. exports China followed the Japanese example of central planning and selling to the world while saving at home.
  17. exports Unfortunately China has also run up a huge amount of debt, not so hidden as that of Japan a quarter of a century ago but very worrisome.
  18. exports There is not a lot of room for China’s exports to grow even in a healthier world economy.
  19. exports The general consensus of economists is that China needs to ramp up consumer spending and sell more within the country.
  20. exports That means letting small businesses grow and backing off the central state planning and heavy industry that characterized its early growth phase.
  21. exports Debt and a Consumer Driven Economy
  22. exports The Chinese drive toward a consumer driven economy may be hampered by excessive debt.
  23. exports The Journal notes that while household debt as a percentage of GDP is falling in the USA it is rising rapidly in China.
  24. exports They believe that Chinese consumers might soon feel the pinch and stop spending!
  25. exports China’s overall economic slowdown has been cushioned by the relative strength of consumer spending.
  26. exports It is meant to be a virtuous transition, in which the economy shifts from investment in heavy industry and infrastructure to consumption-led growth.
  27. exports Nearly a quarter of all mortgage debt outstanding in China was taken out in the past 12 months.
  28. exports Peer-to-peer lenders have also flourished, anecdotally helping home buyers with purchase deposits and down payments.
  29. exports The auto market, which has boomed this year, is also increasingly relying on finance to fuel sales.
  30. exports Now the issue in China will be how much debt consumers can take on before they back off spending while exports fall to sustainable level.