Knock-on Effects from Eurozone + China

choi

My comment: There is no need to read the rest of any of the following.

(1) FT reporters, Asia Shivers in Chill Wind From Eurozone; Global economy; Eastern exporters are trying to find new markets as demand from Europe slumps. Financial Times, Dec 15, 2011.

(a) The graphic:
"Sinking orders[:]

30%  Fall in Haining's sock exports to the EU this year
53%  Annual fall in Korean mobile telecom devices exports to teh EU
72%  Annual fall in Korean ship exports to the EU"

(b) The last paragraph: "'We assume next year will be worse than this year,' says Ms Zuo [Yefen, head of the Haining Socks Association]. 'Companies are trying to shift their focus to other markets or find other solutions but, for now, I have not heard of any effective solution.

(c) Note: Haining  浙江省嘉兴市 海宁市

(2) James Lamont and Jamil Anderlini, Growth Fears Hit India and China. Financial Times, Dec 15, 2011
(first paragraph: "India has warned that emerging market economies are beginning to 'falter,' as China's top economic policyakers described the global outlook as 'extremely grim and complicated'")

(3) Justin Lahart, Shoppers Foot Bill for Soaring Pay in China. Wall Street Journal, Dec 15, 2011.

Quote:

"One of the things that's showing up in Christmas stockings this year: higher prices, courtesy of China.

"After decades as America's go-to destination for low-cost consumer goods, China is undergoing a profound shift. Rapid economic development and a smaller supply of young migrant workers are pushing up labor costs. Tack on rising raw-materials prices, driven largely by Chinese demand, and a strengthening currency, and China-made goods aren't the bargains they used to be.

"Last month's prices for China's imports were up 3.9% from a year earlier, the Labor Department said Wednesday [yesterday], matching October's gain, the largest year-to-year monthly rise since 2008.

"Wednesday's report showed that prices were up sharply for many kinds of goods for which China is the dominant supplier. China accounts for about 80% of US shoe imports; imported footwear prices in November were up 6.1% from a year earlier. And it accounts for about 60% of furniture imports; imported-furniture prices also were up 6.1%.

"Those higher costs are one reason that US consumer prices have risen this year, despte the weak economy. Economists expect Friday's inflation report to dhow that

"Rising wages in China aren't new, says Bank of America-Merrill Lynch economist Ethan Harris. What's different now, he says, is that labor costs have reached a point where Chinese exporters can no longer easily absorb them, and are instead passing them on. That's particularly true for labor-intensive items like shoes.