the Chinese stock market index in a trading house in central Beijing
November 3, 2008. China stocks were still down slightly Monday
after a third rate cut in six weeks and a barrage of initiatives to
shore up banks and prime-pump sputtering economies,
after world stock markets had their worst month ever falling
20 percent in October alone. A measure of Chinese manufacturing
activity released Monday showed factory output shrank sharply
in October in the face of waning orders, while officials
pledged further steps to boost domestic demand to keep
the economy from slowing too much. REUTERS/David Gray (CHINA)
From StockTube Blog
November9, 2008
No doubt China registered mind-boggling annual economic growth but that’s because U.S. allows it. The United States and China symbiosis relationship was a unique one really.
United States is world’s largest economy while China is the world’s fastest growing economy and there’s a difference between them.
China totally depends on U.S. export market to generate jobs for its huge pool of workers while U.S. investors in China depend on continued Chinese economic growth and cheap labor. China’s economic growth was at the rate of 10% per annum during the period 1990-2004 – the highest growth rate in the world. Annually China needs to generate about 15 million new jobs to its huge population. Even during 1997 Asia Economic Crisis the dragon was growing at 8.9%, 7% and 7.1% in 1997, 1998 and 1999 respectively. As a consequence of China artificial low currency, the trade surplus jumped from $57 billion in 1998 to $256 billion in 2007 in favor of China.
Already many China factories are closing putting tens of thousands of workers speechless and out of job. In fact every sector of the Chinese economy is slowing and credit is tightening. From annual economic growth of 11 percent in 2007 the Chinese economic muscle is expected to shrink to 5.8 percent – a level that worries Beijing because anything less than 8 percent means many more will lose their jobs. Speculators, punters and gamblers whose job were to bet on the stock market and nothing else to make a living were watching with horror their invincible Shanghai composite index fall more than 60 percent this year alone.
ETFs/Stocks :
UltraShort FTSE/Xinhua China 25 ProShares FXP $76.32 -25.67 (-25.17%)Related Posts :Sources :
- StockTube Blog: It Ain’t Over Yet – China and Unemployment are Next, November 9, 2008
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