1. China’s “slowdown” is good news
China’s annual economic growth hovered between 8%-15% for over two decades. With each year’s growth against a bigger base, the financial law of large numbers has caught up. That said, Goldman Sachs is predicting China’s economy to still grow by a whopping 6% this year.
Rising labor costs is pricing China out of some markets. Wisely, the government is therefore restructuring the economy to become driven more by internal consumption, instead of exports. To be sure, this assurance of medium term growth will change opportunities for international forwarders. But, this is surely a better scenario than a true medium-term China meltdown.
But with a 7% growth prediction for India, a strong US and the EU continuing its slow recovery, short term growth is good. And further trade development remains strong, with major infrastructure spends (e.g. a U.K. 50% increase in major rail and road projects, widening of both the Suez and Panama canals), and with freer trade (e.g. Iran’s sanction removal, agreement on the Pacific Trade Deal).