China's Growth Is Slowing, Raising Risks for World Economy

Protectionists around the globe should be careful what they wish for: Official Chinese government data report slowed growth, but those figures, which signal risk for the global economy, could understate the problem. Local officials often exaggerate data reports to win promotions, reports David Pierson of the Los Angeles Times, who lists troubling indicators: “Record amounts of coal and iron ore are piling up at depots, signaling waning demand for electricity and building materials. Excavators and other heavy equipment are being idled or sold at deep discounts as housing construction has stalled. The demand for diesel, needed to power those machines, has been flat for six months. Shipyards have laid off thousands of workers and half-built vessels have been left to rust.” Stalled demand and delayed payments from the US and Europe contribute to China’s slowdown. In turn, managers of multinationals based in the West had anticipated big profits from the world’s largest market and shifted operations accordingly. Instead, slowed growth and rising unemployment could lead to unrest. – YaleGlobal