The International Monetary Fund recently forecast that China’s growth would slow to 6.9% next year, well off the torrid pace set for over a decade. Even that downward revision is in trouble, as more signs appear of cracks in the Chinese economy. Manufacturing may have slowed so much because of trouble with economies in the European Union and Japan. The U.S. economy may be large, but cannot carry China on its shoulders.
Commenting on the Flash China Manufacturing PMI survey, Annabel Fiddes, Economist at Markit said:
The HSBC Flash China Manufacturing PMI signalled a slight deterioration in the health of China’s manufacturing sector in March. A renewed fall in total new business contributed to a weaker expansion of output, while companies continued to trim their workforce numbers. Meanwhile, manufacturing companies continued to benefit from falling input costs, stemming from the recent global oil price decline. However, relatively muted client demand has led firms to pass on savings in a bid to boost new work, and cut their selling prices at a similarly sharp rate
The word “slight” may be optimistic.
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