There are other stats, however, that are more problematic, like continuing producer price deflation, which is often a sign of rapidly collapsing demand. Both exports and imports are sharply down from a year ago–this indicates manufacturing is slowing seriously. My own view is that China is just at the beginning of fairly unsettled and rocky economic times–it will likely take 12-18 months for this economic slowdown to work its way through into Chinese labor markets. That’s when difficult tradeoffs and choices will have to be made between lower economic growth and needed economic reforms, especially the rebalancing from high investment towards higher consumption.
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