After Decades Of Double-Digit Growth, China's Economy Is Slowing Down
DAVID GREENE, HOST:
This week, China announced that its economy grew at its slowest pace in decades this past year. And as NPR's Rob Schmitz reports, the slowdown has economists worried about the impacts on the global economy.
ROB SCHMITZ, BYLINE: After decades of near-double-digit economic growth, China's finally beginning to slow down. What does this mean for the U.S. economy?
ARTHUR KROEBER: The direct impact of the Chinese slowdown on the U.S. economy is modest.
SCHMITZ: Modest - that's Arthur Kroeber's take. He's the author of "China's Economy: What Everyone Needs To Know." And most economists agree with that assessment. The proportion of the U.S. economy that depends on China is tiny when taking the overall economy into consideration. Kroeber says a bigger impact on the U.S. economy is the government shutdown, which, according to economists' estimates, is knocking a tenth of a percentage point off the U.S. economy each week.
KROEBER: The Chinese slowdown is more likely to show up in specific sectors or companies that have, you know, big exposure.
SCHMITZ: Like Apple - CEO Tim Cook blamed China's sluggish growth for lower-than-expected earnings forecasts. And construction equipment companies, like Caterpillar, will likely be hurt as China's slowdown continues. China economists have been warning about a tough start to 2019 for months, says economist Christopher Balding.
CHRISTOPHER BALDING: Even back in November, they were talking about the cold winter coming up. They weren't referring to the weather.
SCHMITZ: They were talking about consumers cooling down their spending and local governments mired in debt. Balding says he's surprised Beijing hasn't hatched a stimulus package to counter the slowdown, which has been a staple of government remedies in the past. Instead of impacting the U.S., he says China's sluggish growth will instead impact the economies of Australia and parts of Africa that China has depended on for commodities.
Rob Schmitz, NPR News, Shanghai.
(SOUNDBITE OF BOOKA SHADE'S "SACRED")
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.