I’ve read that China is trying to spur domestic consumption and find other customers. I’m sure they are aware of our upcoming recession. THe 2000-2001 recession caused downturns in stock markets globally, as well as in commodities. China is preparing as best they can, I believe.
“In 2001, the imports into the U.S. fell by $79bil, or 6.3%…the U.S. current account deficit fell by only 4.1%..That reduction in U.S. demand for foreign products had a profound impact on the rest of the world. world merchandise exports shrank by 4% in value in 2001, the largest annual decrease since 1982. …
.. economic growth rates in 2001 slowed greatly in every region of the world except Africa. The slowdown in growth ranged from 24% in the transition countries to 91% in the newly industrialized Asian economies. Exports contracted in 11 out of their 16 largest economies and in all of the export-oriented Asian economies…..
Global commodity prices fell for almost 2/3 of the commodities in Table 9.7, with more than 1/3 suffering double digit declines…The stock markets were a disaster zone.”
Table 9.7 is World Bank data on commodity prices in 2000 and 2001. It shows timber -16%, rubber -13%, copper -13%, gold -3%, nickel -31%, silver -12%, zinc -21%, coconut oil -29%, crude brent oil -13.6%…only the price of grains and other food increased.
– The Dollar Crisis, Richard Duncan, p. 184 -187
So I think the Chinese know they will be hard hit this time,but how can they best prepare? Their politicians and bankers are extremely educated and have long term vision, so I trust they will make the best decision for their country.
