The Chinese Sneeze


It used to be said that when America sneeses, the world catches a cold.

As time passes this saying is losing its currency, especially with the rise of China over the past two decades. We are all in the midst of a changing of the world order where the China in waxing and the US is waning.

We have all been enjoying China’s ascendency caused by what some economists and observers have called the China Miracle – the dramatic economic growth of China that has resulted in millions of people leaving the hinterland to clock to the cities for jobs, usually in factories.

And when the larger cities got saturated the economic growth spread to the second tier cities. Still, the growth persisted, but good times don’t last forever and miracles aren’t perpetual. 

Now we are seeing a slowdown of the Chinese Miracle as the rising labor costs have resulted in investors shifting their operations to cheaper markets like Vietnam. 

The slow economy worldwide has also resulted in less demand for Chinese goods. Factories are being shut down, workers laid off. 

This has resulted in a chain reaction of a lower demand in commodities and minerals, creating a domino effect in other economies including Indonesia. 

China has sneezed, how bad a cold are we likely to catch? This insightful documentary by the Financial Times may give us a clue. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s