The Global Recession Gets Official: China Exports Fall
December 10, 2008 by Douglas A. McIntyre
If there has been one constant in the global economy since the beginning of the decade it is that China’s GDP and exports have kept moving up. There has been an almost endless demand for the inexpensive goods made in the world’s most populous country. For exports to move down sharply would mean that worldwide consumer consumption and confidence has fallen into a deep hole.
According to MarketWatch, "China’s exports declined in November, the first such contraction in more than seven years, underscoring the severity of the global slowdown, and painting a bleak outlook for the sustainability of mainland exports in the months ahead."
The bad news is a two-edged sword. China’s rapidly growing middle class has been at the core of the nation’s economic growth. If its export figures are shrinking, so are production and eventually employment. The second great engine of China’s GDP growth is the consumption of goods made "in country" by workers who have moved from rural areas into cities. That has begun to collapse.
The next sign of really bad news out of China is likely to be a particularly sharp drop in GDP.
Douglas A. McIntyre
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