Tuesday, May 11, 2010

China’s Engine Sputtering?

Looking at the latest release of the OECD economic indicators for China, it appears that the massive jump in economic activity seen since the panicky period of late 2008 may be drawing to a close.

China’s leading economic indicator has now declined for three consecutive months with the latest March period showing a notable month-to-month slump of 0.17%.

Looking at past recessionary periods, it’s important to note that while China’s economy may be slowing, it will take some time to determine the severity.

We may be seeing the beginnings of an abrupt pullback of equal and opposite force to that of the government sponsored propping applied during 2009 or simply a slowing of a more durable overall recovery as was seen during the periods following the 1990s and early 2000s recessionary periods.