Most economists are concerned about how a potential economic collapse in Europe would ripple across the Atlantic, but are they equally concerned with what some believe to be a much larger looming disaster coming from China? A post on Business Insider Friday from Also Sprach Analyst argues that evidence suggests that the Chinese economy has been slowing down worse than the market expected, or official data has suggested.
We have already made this point before, with anecdotal evidence and indirect gauges of the Chinese economy pointing to more severe slowdown than the official data suggest. And even though one may insist that the Chinese economy has not hard landed because official data suggest that GDP growth remains above 7%, the economy has indeed hard landed as far as large number of Chinese companies and the people they employ are concerned. Yesterday’s miserable PMI data, which is “just awful” according to Wei Yao of Société Générale, add to the gloom.
With steel exports down and other financial indicators moving in the wrong direction, how tightly wound is our economy with China’s and would a hard landing there spell certain economic disaster? Conversely, if China’s money is escaping west, could it be a good thing for the U.S.?