What would a China slowdown mean for the rest of us? In the main, three things will become evident.
- First, China will remain committed to letting its currency, the yuan, rise in international foreign-exchange markets. A stronger currency will encourage companies to rely less on exports and more on goods and services consumed domestically.
- Second, Chinese products will no longer be the cheapest on the shelves in years to come because China’s inflation rate will rise along with its wages. This is natural when any nation climbs a rung on the development ladder, which is what China is now doing.
- Third, the Chinese market for raw materials and heavy equipment—cranes, bulldozers, factory machinery—will slow….
“• Third, the Chinese market for raw materials and heavy equipment—cranes, bulldozers, factory machinery—will slow….”
I would guess with the stronger Yuan the input cost to Chinese products will come down. How much of the Chinese product costs is material and how much is labour? How about building China infrastructure would this not accelerate because of lower material input cost?