The commodity, reprocessing and the developed country exporters have to become accustomed with the fact, that China’s economy is slowing down. This year the demand from China has weakened considerably.
The property slump in China caught the commodity suppliers off guard and reporting reduced demand from the second-largest economy.
That is bitter news for the global economy which is more and more dependent on China’s economic performance.
According to the statistics, since the beginning of the new millennium China has quadrupled the number of countries to which it was the biggest export market. At the same time, USA has lost half of the number countries which held the USA the biggest export market.
In terms of exports as a share of GDP, all commodity nations experienced their China exposure rise; some doubled — Japan, South Korea, U.S., Brazil, Canada, Chile — while some tripled — Germany, the EU — and some even quadrupled, like Australia.
For commodity exporter countries such as South Africa, Australia, Indonesia and Brazil, the Chinese slowdown has been predictably negative.
Re-exporting nations — those most dependent on China’s demand for electronic appliances including Taiwan, Korea, the Philippines and Vietnam — are better off. Vietnam and the Philippines were able to increase their market share and value of their electronics and textiles exports to China. Meanwhile Taiwan and Korea increased supplies to Chinese consumers.
Noteworthy to keep in mind that the Chinese role as manufacturer in their export has decreased since the global financial meltdown. China is moving up the value chain due to weaker developed-market demand and eroding competitiveness in labor-intensive sectors. The modest Chinese demand for developed exporter goods could mean more competition.