After being an economic powerhouse for several decades, China is beginning to feel the pinch of the global recession. The economy is losing its steam.
A nationwide real estate downturn, stalling exports and declining consumer confidence, have produced what a Chinese government official, quoted on the official government Web site this week, characterized as a “sharp slowdown in the economy.”
Though the Chinese economy continues to expand, construction workers are losing jobs in droves and retail sales grew last month at the slowest pace in more than three years. Investments in fixed assets have increased more slowly this year than in any year since 2001.
China’s unexpected economic difficulties are starting to unnerve investors in world markets, especially commodity markets, as China is the world’s largest consumer of most raw materials and second largest consumer of oil. The United States is the first oil guzzler.
The good news about this economic slowdown, is that the price of oil could go south and that would be a sign of relief to our drivers who are preparing to hit the road this summer. The bad news is that fewer ships could transit the Panama Canal decreasing revenue. This revenue is badly needed to pay the expansion of $2.5 billion currently underway at the international waterway.
It will be a nail-biting experience to monitor this lagging economic situation of the second largest economy in the world. Good Day.