Judith Marks, the CEO of Otis Worldwide, recently expressed optimism about China’s recovery from the COVID-19 lockdown. However, the Chinese economy has faced challenges, particularly due to a debt-ridden property sector. This slowdown has impacted Otis, a leading elevator maker, as China is its most profitable market for new equipment sales.
While fewer elevators are needed in China’s property market slump, the majority of the impact is felt in Otis facilities in China rather than in the United States. However, the direct effects of China’s slowdown on the US economy are relatively modest. Brad Setser, a former Biden administration trade adviser, stated that whether China grows at zero or 5 percent, it doesn’t significantly impact the US export side.
A prolonged or deeper downturn in China could have global ramifications, affecting major commodity producers and causing a negative feedback loop in financial markets. China’s neighboring countries, mostly reliant on exporting electronics to China, have already felt the effects.
China’s economic model, which heavily relied on public infrastructure and housing investment, is exhausted. The country now aims to shift towards a consumption-based economy, but this transition is a work in progress. While China continues to contribute to global growth, its impact on trading partners may be overstated, with most benefits staying within the country.
China’s trade surplus means it sells more to other countries than it buys from them. Therefore, countries running a trade surplus subtract more from global growth than they contribute. China’s export sector has been crucial to its economic growth in recent years.
Overall, China’s economic slowdown may have some global ramifications, but its direct impact on other economies is relatively modest.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
