May 28, 2011
China And The World Economy: Crosstown Traffic
The global economy is slowing. For one of its biggest members, that is good news.
For the past year or two, the big economies have experienced a “multi-speed” recovery, as the IMF calls it. The recovery has resembled third-world traffic, where juggernauts and rickshaws, cars and cycles ply the same lanes at different speeds, often getting in each other’s way.
But for the past month or two, this traffic has slowed in unison. The deceleration is evident in the prices of commodities, which have fallen by 8.6% since mid-February, according to The Economist’s commodity-price index. It is also reflected in American manufacturing. New orders for durable goods, such as engines and cars, fell by 3.6% in April (albeit after a strong rise the month before). Factory output is still growing modestly, according to the Philadelphia Fed’s latest survey, but has lost more momentum since March than in any two months since November 2008. Full story..
Source: The Economist