Contraction in China’s manufacturing sector now inching closer to one year. What does this say about the global recovery?

from My Budget 360

China is feeling the deep impact of the global slowdown. The country has seen unprecedented growth for the last few decades and is now entering into a very unfamiliar territory. Slowing demand. Data is reflecting that the slowdown on exports from places like the US and especially Europe is having an impact in their very important manufacturing sector. China also has hundreds of thousands of empty apartment units as the country has been heavily reliant on real estate building to support growth. This economic contraction is not a surprise as global demand has fallen largely because of the massive levels of debt in a variety of countries and the process of deleveraging that is occurring. We rarely see the word “decouple” from the economic corners of the world because that is largely a myth. The global economy is more interconnected than many would want to think. The slowdown in China will have an impact in many places including the US.

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