Manufacturing slows in China
A Chinese woman works at a cotton thread factory in Huaibei, in eastern China's Anhui province on June 1, 2012.
Jeremy Hobson: Figures coming out of China are showing a slowdown in manufacturing. Economists don't like to see that because if Chinese manufacturers are making less, it means Western consumers are buying less.
Marketplace's China Bureau Chief Rob Schmitz is with us now from Shanghai. Good morning.
Rob Schmitz: Good morning, Jeremy.
Hobson: Rob, when we hear about a slowdown in China in manufacturing, how serious of a slowdown are we talking about?
Schmitz: Well you know, I can tell you a specific story of the slowdown from my flight to the United States this past weekend, and my seatmate was this gentleman that manages a factory outside of Shanghai. His company makes air compressors and he exports most of them to the EU and the U.S., but of course both those markets are drying up. So he told me he has had to layoff 10 percent of his workforce this year. But when I asked him where he was flying from, he tells me Brazil. He had just spent a couple weeks there and boy, he was sure happy. He found a bunch of new clients there. He was just happy to have found a country that had some money to buy his products.
Hobson: So there may be some hope for the global economy coming from South America at the moment. Rob, let me ask you about something else -- stocks have been dropping around the world too and I want to ask you about what happened today in Shanghai. The Shanghai Composite Index closed at a very, shall we say, interesting number.
Schmitz: Yeah, the Shanghai Composite Index fell 64.89 points today. You know if you separate those digits out, it's 6/4/89 -- the date of the government's brutal crackdown on student protestors in Beijing. Today happens to be the 23rd anniversary of that event. So, I kid you not, the term Shanghai Composite Index is blocked in search engines in China as a result because many people have been on Twitter, they've been on the Chinese microblogging service Weibo on this. And so the government has already cracked down on that search engine term.
Hobson: Marketplace China correspondent Rob Schmitz in Shanghai. Thanks, Rob.
Schmitz: Thanks, Jeremy.