Manufacturing slows down in China

A machinist uses an industrial saw to cut a steel bar at a workshop Shanghai on August 23, 2012.

Manufacturing activity fell last month in China for the first time in almost a year. This follows a string of other bad news when it comes to the Chinese economy.

But global markets are up following the news, because a weakening economy there makes it more likely that the Chinese government will step in to help.

For more, we go to the BBC's Martin Patience, who is in Beijing.

He says that China is used to double-digit growth, and that everyone seems to be agreeing that China is now slowing down. Why should the rest of the world be worried? Because Chinese consumers, who don't typically buy a ton of goods from overseas, aside from luxury items, could pull the purse strings even tighter.

During the previous financial crisis, the Chinese authorities did take matters into their own hands with a massive stimulus plan.

But it seems unlikely that the same kind of measures will be taken this time around, in part because "when you pump so much money into economy, you see inflation," Patience points out.

 

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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