by, 29th-June-2009 at 04:05 PM (657 Views)
The supply side has increased whilst the demand side has slowed... just read another media brain (from UK as usual) is saying that the Asian economies (other than China) whilst are busily exporting to China and avoiding a prolonged recession, but eventually, the final finished goods that are produced in China would have to go elsewhere - and other than US as the final and ultimate consumer, where else can the Chinese export to? Surely this would mean the growth in China is not sustainable?
Could be. Would be. Might be... who knows? But if he were to compare the decline in the Chinese economy vs that of the Japanese, he would have noticed the substantial difference between the two - there is a marked difference between the type of goods being exported to the USA. The Japanese' are mostly high valued, hitech, luxury goods whilst the Chinese' are mainly low end, if not, essential goods and/or food that the Americans could do without. This probably explains why the Japanese economy suffers that much more than the Chinese. But this probably also explains in a way the Americans, like it or not, they can't do away with Chinese exports absolutely...
So to answer to that media brain's negative slant I guess, he is partially right, but I won't be surprise once the consumer spending in the US were to pick up, the Chinese exports into that country will be correspondingly increased.
Unless the USA begins to raise their protection barrier to keep the Chinese exports out and opt for the higher cost locally produced goods or produce.
...and raise the spectre of a trade war with China.