November 10, 2015
Forget Greece: China's economic slowdown is the biggest story of the year
There’s hardly an industry or a part of the world that isn’t counting on China to keep growing strongly. Soon, that could be a big problem
I stood alongside the chairman of the board of a state-owned enterprise in eastern China. The factory floor, partially open to the elements, stretched out far in front of us, littered with towers and blades designed for some of the world’s largest wind turbines. It was an impressive sight, one to which regular visitors to mainland factories are accustomed: China as the workshop of the world.
But something was missing: workers. ‘They’ve been given the day off,’ the chairman said with a slight cough, as we stared out over the vast compound. On a Wednesday? It was hot but not searing, and workers get the day off only once the mercury tops 40°C. ‘It’s a local holiday,’ he said. But there are no such things in the People’s Republic, and national holidays only occur in May, October and around Chinese New Year.
The company’s woes are a microcosm of the daunting challenges that face China’s stuttering economy, the world’s second largest after the United States. This week China devalued its currency by 3.6 per cent in a dramatic bid to encourage exports — a clear sign that Beijing is panicking. Forget Greece. This could be the biggest financial story of the year. Even the threat of a significant slowdown in China’s economy could be enough to send the rest of the world tumbling back into recession. It’s certainly a source of concern for Britain’s still-fragile recovery. When the Bank of England Monetary Policy Committee met last week, they dwelt on the subject of China far longer than usual.
The picture isn’t pretty. From the polluted central metropolis of Zhengzhou, to Shenyang in the rustbelt northeast, the overwhelming sense is one of pessimism and urban decay. Idle cranes and vacant building sites dot the landscape.
Click on Link:
http://new.spectator.co.uk/2015/08/chinas-long-boom-is-finally-faltering-and-well-all-feel-the-crunch/
