Commentary: China export collapse highlights shift

The global economic slowdown was put into stark view on 8 March with the latest report on China’s exports. In US dollars, they plunged 25.4% year on year in February, while imports declined 13.8%. The figures confirmed the weakness seen in the Caixin China Manufacturing Purchasing Managers’ Index (PMI), which came in at 48.0 for February – the 12th consecutive month of a reading under 50, indicating contraction in manufacturing activity. China’s economy is clearly shifting far away from its high growth mode driven by manufacturing and exports. While the government will aim to manage the slowdown and transition with stimulus measures, these are likely to be measured, so to speak. The measures may supplant demand shortfalls in then short term but leave heavy debt burdens for the future, depressing consumption further, according to John Richardson

and Paul Hodges, co-authors of the joint study by ICIS Analytics & Consulting and International eChem “Demand – The New Direction for Profit”. The authors maintain a major shift in mindset is needed for chemical firms to survive and prosper in today’s environment.