Sunday, October 28, 2012

Visualizing China's Chain Reaction

China is the largest trading partner of Korea.  Due to the symbiotic relationship of the U.S./China, China could have risen so fast in the first place.  Both economies are running out of steam.

One can't really predict with a great deal of certainty what the future of China holds.  And yet, one thing seems to be sure: The Chinese political and economic structure can't continue in its present form.  The same is true for other countries as well.

From Zero Hedge:

As the saying goes, when China sneezes, the rest of the world catches the cold. So far, if one were to look at the macro-economic surprise indices for US, Europe, and China, it would appear that China's weakness was largely ignored by US and Europe which have notably 'outperformed' relative to expectations in the last two months. However, what is apparent is that this is a lead-lag relationship which the FT provides an excellent flow chart of how China's dominant ebbs and flows chain-react around the world's supply (and demand) chains. Furthermore, the successive peaks in economic cycles since 2009 have been lower and lower as even relatively minor shifts in China's domestic production, stockpiling, or spending can have big impacts on the other side of the world. As the IMF notes: "China can transmit real shocks widely, whether these originate domestically or elsewhere."

http://www.zerohedge.com/news/2012-10-25/visualizing-chinas-chain-reaction

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