And still more troubles, this time in Singapore. From William Pesek at bloombergview.com:
Singapore is the closest thing Asia has to an economic barometer. Its highly open, trade-reliant economy usually signals when trouble is approaching the global stage. And at the moment, Singapore is flashing clear warning signs.
The city-state’s gross domestic product plunged 4.6 percent last quarter, a downturn almost certainly triggered by China. Singapore’s plight may mark a dangerous inflection point not just for Asia, but for the entire global economy.
After the 2008 global crisis, China’s 9-percent-plus growth picked up the slack from a West licking its financial wounds. But as Asia’s biggest economy cools, officials from Seoul to Brasilia are finding themselves without a reliable growth engine. Uneven recoveries in the U.S. and Europe have already slowed the exports that power most Asian economies, including Japan. China’s downturn could now throw Asian manufacturing into reverse.
Morgan Stanley’s Ruchir Sharma warns that “the next global recession will be made by China.” The balance of data — including Singapore’s abrupt shift toward recession — suggests China isn’t growing anywhere near this year’s 7 percent target.
Shanghai’s day traders celebrated this week’s news that Chinese exports rose 2.1 percent in June. The more interesting figure, though, was the 6.7 percent decline in Chinese imports. That helps explain the stunning 14 percent drop in Singaporean manufacturing from the previous three months. The same goes for Singapore’s non-oil exports to China, which fell 4.3 percent in May, 5.1 percent in April and plunged 22.7 percent in February.
To continue reading: China’s Economic Troubles Start to Spread
