Tuesday, April 19, 2016

The End of the Chinese Miracle?

The mainstream forecasts for the Chinese economy have been bullish for years till the Chinese stock market hit a wall last year: since then Wall Street and other analysts seem to be gyrating between bearish and bullish.

Maybe rather than forecasting what could happen, let's look at the reality on the ground, such as the China Containerized Freight Index (CCFI), an index that tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world.

According to Wolf Street, "....the China Containerized Freight Index has.....

......dropped last week 0.6% to 636.14, its lowest level ever. It has plunged 41% from the already low levels in February last year, and 36% since its inception in 1998 when it was set at 1,000......"  A clear sign of a slowdown in the Chinese economy.

Then the following mini-documentary - with a hat tip to Richard Martin's Wakeup Call - by the Financial Times shows how the Chinese miracle is ending for many Chinese workers, who are moving back to their hometowns, and trying to find work there:

So, what should we make of China: is it able to manage this next phase in its economic development or is the Chinese miracle ending? Time will tell.

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