While most of the attention is on Greece at present we should be paying more attention to the Chinese economy, which is definitely slowing.
Chinese retail sales, industrial production, power usage and merchandise trade for April were all lower than expected and the year on year increases were well below figures recorded in 2011 and earlier this year.
Chinese imports rose only 0.3% year on year in April compared with 5.3% in March.
The slowdown in Chinese imports, and exports, will have a major impact on the country’s main trading partners.
The following figures show exports to China as a percentage of total exports for countries in the Asia Pacific Region;
| Hong Kong | 52.30% |
| Australia | 27.60% |
| Taiwan | 27.20% |
| Korea | 24.20% |
| Malaysia | 13.10% |
| New Zealand | 13.00% |
| Philippines | 12.70% |
| Thailand | 12.00% |
| Indonesia | 11.30% |
| Vietnam | 10.60% |
| Singapore | 10.40% |
| India | 6.00% |
Australia and New Zealand have become more and more dependent on China in recent years with the world’s second largest economy now accounting for 27.6% of total Australian exports compared with only 6.2% a decade ago.
Over the same ten year period China’s share of New Zealand’s total exports have risen from 4.4% to 13.0%.
Dairy prices have fallen in recent months as have iron ore and other hard commodity prices. These falls are mainly due to softer demand from China.
China’s economic statistics will be watched closely in the months ahead because it will have a much more direct impact on the Australian and New Zealand economies than Greece.
Brian Gaynor