Economic tremors in the West reach China

[populistdriven]

Source: The Times

A slowdown in the flow of containers through the giant ports of southern China is providing an amber warning light that all is not well in the vast workshops of China's eastern seaboard. Container traffic growth in Shenzhen and Shanghai, China's biggest ports, slowed in June as weakening demand took its toll on trans-Pacific trade. Traffic at Shenzhen, the world's fourth-largest port, fell in June by 0.6 per cent from the previous month and grew only 3.5 per cent against the same month last year. Throughput in the first half of the year was up 7 per cent, half the rate of growth last year.

The slump in traffic to the West Coast of the United States is hitting the massive Yantian container terminal operated by Hutchison Whampoa. It is suffering volume declines for the first time. A majority of Yantian's traffic is from shipping lines servicing routes to North America, where demand has been driven down by the American property slump and dwindling consumption of household consumer goods. It is expected to report a drop in volumes for the first half, having declined for five consecutive months.

Shanghai's container throughput is slowing, too. Growth in the first half of the year slowed to 10.4 per cent, half last year's rate of increase, and analysts are predicting hard times ahead. “We've seen the peak. Container terminal shipments are now in a downtrend,” Geoffrey Cheng, an analyst for the Daiwa Institute of Research, said. “It's unusual that throughput in June, the peak season for container shipping, would slow from May.”

~snip~

Inflationary pressures, a stronger currency and soaring costs are eroding the competitiveness of the workshops on the Pearl River Delta. Some are calling for the return of the tax rebates that drove Chinese exports in the 1990s. In a world of expensive fuel, China's distance from the markets of the West is becoming a challenge.

Read more: http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4368529.ece

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The Chinese economy is still growing at an APR of 10% and and Chinese banks are required to set aside 17.5 percent of deposits. The Chinese can afford to stimulate the economy and keep its growth at 10%. They are also being flooded with overseas investment cash.

[AnneD]

1. Phenomenal growth....

has to an extent masked some of the discontentment in Chinese society. However, the distribution of wealth has been lopsided. Farmers and like folks have not enjoyed China's prosperity as much as others. Now if others experience an economic slowdown, it could lead to widespread social unrest.

[Fovea]

2. The Chinese people will make three demands.

Repair the sky, earth and water.

The return of the iron rice bowl.

Democratic reform.

The PRC will have to decide if they can break the will of China
again. The difference is, it feels like the mandate of heaven is fading.

[madrchsod]

3. china has problems

inflation and apr is dangerously reaching the equal mark. Vietnam is under cutting the chinese on labor cost and working conditions/sweatshops. fuel usage on container ships are rated at barrels per hour.