China Manufacturing Warning to The World
China manufacturing, like the world over is contracting.
I have made this point before, and everyone just chooses to ignore it. Very seriously, we should all be panicking. Odd words from an economist, but this is how the Great Depression started?
Manufacturing contracted, precisely as everyone had been getting rich borrowing money to buy shares.
This is not a distinctly China problem, but that the world's two largest economies are clearly in an industrial production and manufacturing contraction, along with Japan and others, is as worrying for a global economic outlook as it gets. I have spoken before of how all commentators are choosing to look past this real world slow-down on the basis of supply chain disruption that is temporary. But, just how temporary is it? Also, such look past analysis completely fails to take into account the very real and lasting damage that is being done.
Vaccinations have been seen as some form of Holy Grail, and they have been tremendously successful in the short term. The jury is still out as to their long term efficacy however, as we simply have not yet had the time to discover.
One thing that its certain, is that vaccinations do not equal economic growth. We have seen this very clearly in the UK and elsewhere.
China's manufacturing has been flat to falling for three months now. Services are also slowing significantly. This broad based economic slow-down in China could well be the final permanent re-adjustment to a more reasonable mature capitalist style rate of economic growth.
Such an eventuality would represent a major re-set button for all of the Asian region, and indeed the global economy.
To simply look past such risks occurring in real time, is fraught with danger.