Improvement In China Exports May Indicate Strength In Other Emerging Markets

New data from China shows that its manufacturing sector is more stable than it has been in a year and that exports are moving up very modestly.

According to Reuters, “The new export orders sub-index in the official PMI breached 50 for the first time since June 2008, rising to 50.1.”

Since consumer spending in the US, UK, Japan, and EU is not improving, the question is where are the exports going?

The only probable answer is other emerging nations such as India and Brazil where the economies have proven to be more resilient than those of countries with larger GDPs. The trend may show that a new set of alliances is beginning to emerge among emerging nations. It is one in which China may not have to rely so heavily on the strength of  consumers in the West. It will buy natural resource from countries such as Brazil and sell finished goods back to a growing business and consumer base there.

China’s export numbers may be an indication that the balance of economic power in the world is shifting more rapidly than expected.

Douglas A. McIntyre