The declining export figures have not the influence on China’s economy that is commonly believed, says economic analyst Arthur Kroeber in The Globe and Mail. Not the export, but failing real estate and declining demand for the construction industry set off the current economic problems in China, he says.
The managing director of the Beijing-based research firm Dragonomics:
“China is more of a construction-driven economy than an export-driven economy.” China’s troubles began when a housing price bubble burst, which reduced demand for housing materials, he said, adding that the downturn only later spread to exports.
With the Chinese government investing so much in stimulus, construction should pick up later in the year, Mr. Kroeber said. “They should be able to weather what will be a really bad year in exports.”