Monday, August 3, 2009

"China is Leading the Way"

Bloomberg reports:

China’s manufacturing expanded in July as record lending and a 4 trillion yuan ($585 billion) stimulus package stoked a recovery in the world’s fastest-growing major economy.

The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 52.8, the highest level in a year, from 51.8 in June, CLSA Asia-Pacific Markets said today in an e-mailed statement. An official index, released Aug. 1, also expanded.

In signs the global slump may be easing, reports today showed manufacturing expanded in the U.K. for the first time in more than a year, shrank less than initially estimated in Europe and declined at a slower pace in Australia.

“China is leading the way,” said Tomo Kinoshita, an economist at Nomura Holdings Inc. in Hong Kong. “We can expect global production to improve gradually in the months ahead.”

My question is what happens to China (and other global economies) when the stimulus is taken away?

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