Ripple Effects From Weak Growth in China
The story of China’s overproduction of industrial goods, and its impact on the world economy, is well told in The Wall Street Journal. This story explains how the U.S. tire industry is hurting due to an oversupply of tires from China. The country built up its manufacturing capability, only to see growth slow and prices drop. Imports into China have suffered as well, causing ripple effects around the world.
“For U.S. consumers, that is good news. But for policy makers and corporate executives, declining prices present a real challenge. The declines can sap profitability, deter investment and block wage growth, all of which are needed to help the world break out of its years of underwhelming growth,” according to the story.
You can read more about it here.