Dec 02, 2011

Europe is reported to be China’s biggest trading partner; with the turmoil going on in Europe these days their imports from China have slowed. This is having an effect on China’s manufacturers; last month the China PMI (purchasing manager’s index) dipped to 49. Anything below 50 signals contraction.
China’s new export orders declined to 45.6.

This is good news for those who import from China because:

1. China’s economy has been on fire the past two years, stoking wage inflation and contributing to labor shortages. The slowdown should help bring this back under control.

2. Delivery times will improve. Without full order backlogs (and hopefully, eased labor shortage problems), orders should be delivered faster.

3. The occasional delays caused by power outages caused by too many factories using too much electricity should decrease. Last year one of our factories had constricted work times because the local municipality was limiting the availability of their access to electricity.