It seemed like it was just yesterday that China’s exponential growth appeared to be perpetual and its exchange traded funds (ETFs) were having a heyday. Well, the results are in and China’s economy is in the throes of a downturn, but it’s expected to mitigate the damages to its economy through a series of careful steps.
China, the fourth-largest economy in the world, is leaning toward deflation with an expected “sharp” drop in its producer price index for December and a GDP projection of 8% for 2009, according to Bloomberg.
Last month, exports from China fell for the first time in seven years, imports contracted, and manufacturing needed some sort of resuscitation as global recession pulls China’s economy further downward, writes Mike “Mish” Shedlock for Global Economic Analysis.
The expected $585 billion stimulus package that will be injected in the second quarter of next year is noted to be a bit late as China’s economy is said to be on pace to bottom out in the first quarter.