From Capital Economics
Indeed, there are already warning signs in the recent data. For example, China’s demand for imported commodities has weakened sharply. The value of China’s imports is still growing rapidly, but this is a reflection of higher global prices. Focusing instead on the volume data, China’s imports of many key commodities are actually falling outright. Chart 1 shows the April data, released on Tuesday, but the year-to-date numbers tell a similar story.
You can see what we mean in the above chart. Total floorspace under construction (whether measured for overall building construction or just for “commodity” buildings) peaked outright in January and has fallen sharply in the past two months. So have auto sales, which are now nearly 20% off November highs. Property sales peaked in November in volume terms and are declining sequentially since the beginning of the year. And after rising steadily for the last three quarters domestic steel consumption is now flat.As Mike Shedlock points out
Dramatic Slowdown in China ComingFrom credit bubbles, to property bubbles, to malinvestment and runaway inflation, China will slow down, but the questions are when and by how much. Saskatchewan will definitely be impacted. I do not believe it is 2008 all over again, but the situation in China is worth watching.
China is going to slow, much more than anyone thinks. The commodity producers and commodity producing countries like Australia and Canada will take a hit.
More on China and commodities here
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