China’s economy is supported by exports, and the recent slowdown in the global economy has frozen their investments and exchange traded funds (ETFs).
The factory orders are at the lowest levels seen since the government began measuring them, causing a chain reaction of laid off workers and the need for a massive stimulus package. Most of China’s customers are overseas, such as in the United States, and many economies are cutting exports, leaving China’s exports with no place to go.
Scott Tong on Marketplace reports that the economic stability in China goes along with social stability and officials and leaders are looking at protests and angry laid-off factory workers smashing windows and overturning police cars.
So far, Beijing has responded by pledging subsidies to rural resident and slashing interest rates. The government has responded elsewhere by removing price controls on items such as grains, oil and meat, reports Terence Poon for The Wall Street Journal.