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China econ declining – less industrial demand, real-estate, and high debt levels
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China econ declining – less industrial demand, real-estate, and high debt levelsSeth 15 [Shobhit, freelance financial writer, “Can the Tech Sector Save the Ailing Chinese Economy? (CCCQ, QQQC)”, 12-15-2015, Investopedia, http://www.investopedia.com/articles/investing/121515/can-tech-sector-save-ailing-chinese-economy.asp]-DD The Chinese economy has had a rough ride lately. Recent developments in the markets and the nation's macroeconomic figures don’t indicate a healthy picture. Amid continued news of a slump in the Chinese economy, this article explores why the technology sector can act as a savior for the Chinese economy. (For more, see Is Now the Time for Chinese Stocks?) Signs Of An Ailing Economy Chinese markets suffered the worst stock market crash since 2007 when the Shanghai Composite index tanked by more than 8% in late August 2015. The declining demand for Chinese goods from international markets has resulted in falling exports in recent months. The imports have also declined due to lower consumer demand in domestic markets. The Chinese growth rate is suspected to hit its lowest levels in last 25 years, amid the falling industrial production and a sharp decline in the real-estate market. High debt levels, multiple yet ineffective rounds of monetary easing, and rumors about a further rate cut, are some more indications that the world’s most populous economy may not be in the right shape. (For more, see The Origins of the Chinese Stock Market Collapse.) Relations good – China econ, tech sectorCollapse of US-China relations devastates tech sector – China produces a vast majority of motherboards and is key to strategic global industryLampton 01 [David, Director of China Studies @ Johns Hopkins Univ, “The U.S. – China Relationship”, Frontline – PBS, http://www.pbs.org/wgbh/pages/frontline/shows/china/experts/relations.html]-DD It's potentially very important. First of all, China, unknown to many Americans, is our fourth-largest trade partner. There are certainly probably 300,000, 400,000, 500,000 American jobs that are directly dependent to exports to China, and there are some of our most competitive high tech sector. Obviously, given the state of our own economy, we don't need more unemployment. ... But China's economic importance -- particularly to the United States, but the global economy -- hasn't been recognized in another way, and that is inter-dependence. Let me just give you a fact that I think is just demonstrative of a larger reality. Eighty-seven percent of the motherboards of computers in the world are made in Taiwan. And of that 87 percent of the brains of a computer, the motherboards made in Taiwan, 50 percent are now made in the PRC, and that industry is even moving more rapidly towards the PRC. So in certain key areas, China's component manufacturing is absolutely key to a strategic global industry. So whether you look at it narrowly, or in terms of jobs, China is essential. Also, China is the most rapidly growing major economy in the world today. And heaven knows, with Japan lagging and Europe's economy stagnating and the Americans hovering near a recession, the world needs all the center of growth that it can get. So I think we are going to recognize that we have a very great interest in China's prosperity. Download 357.18 Kb. Share with your friends:
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