WASHINGTON — Despite recent reports of China as an emerging threat, its economic outlook is much more dim. The manufacturing sector of the country actually contracted (or shrunk) in the first three months of this year.
Reuters reported that the world’s second-largest economy now has to worry about if its government stimulus will be enough for the country.
The data came from a private survey of firms. Specifically, manufacturing output and new orders were weak the first three months of 2014 even with some increase in export orders. What is to blame? Weak domestic demand at home.
This comes at a time where China is trying to reform its economy and privatize it, but has only seen a prolonged slowdown. The Chinese government has promised more investment in solar power, but the solar energy sector in China has pretty much collapsed due to too many firms and too few buyers.