Chinese exports, one of the last predictable pillars of the economy, have just lost their predictability. China has a very big problem.
The Chinese economy faces a new and very serious challenge. Due to the coronavirus pandemic and the resulting disruption of supply chains, rising freight and energy prices, global concerns have begun to change their strategy.
Companies are fleeing China
China’s dominance in industrial production has begun to wane over the years. The largest companies, mainly technology and automotive giants, have noticed the risks associated with the production of key components in China and other Asian countries for which the Celestial Empire was a transshipment port.
The export data last week was a serious wake-up call for the Chinese authorities. Not only did they show much slower growth than expected, but for the first time in four months, a slowdown is clearly visible. The problems are mainly noted in the southern and eastern part of the country, which is famous for its industry and the largest ports through which goods were sent to the West.
Chinese analysts predict that exports will continue to decline in the coming months. This is evidenced by macroeconomic data from the economy. Exports are now more important than ever, they add, as every other pillar of the economy falters. Not only the construction sector looks terrible, but also the manufacturing sector.
Production moves to Europe and the USA
Particularly loud in recent weeks has been Intel’s decision to invest $5 billion in a semiconductor manufacturing plant in Piedmont, Italy. President Joe Biden is very clear about the need to return production to the US, which is looking for an opportunity to develop the economy.
Source: Wprost
