Industrial production in April hit its slowest pace in more than
three years, while growth in exports sputtered and imports were flat.
In response, China's central bank over the weekend said it would
ease reserve requirements for the nation's banks. The move frees about
$70 billion for lending to stimulate the economy. But some economists
said more aggressive action was required to keep China from a hard
landing.
A sharp downturn in China would be a blow for the global economy
and in particular California, which has long been a beneficiary of
booming trade with China.
The deceleration is already being felt at Southern California
ports. In the first three months of this year, container traffic
through the ports of Los Angeles and Long Beach was up just 0.6%
compared with the first quarter of 2011, largely because of slowing
shipments from China.
Growth in exports is weakening as well. China is now California's
third-largest export market, behind Mexico and Canada, snapping up a
record $14.2 billion of computers, wine,TDM over IP
General Electric Jinfeng: Obviously. It will form functional life
easier citrus and other products last year. But California exports to
the Middle Kingdom barely budged in the first quarter, up only 0.4%
from the first three months of 2011.
Ross DeVol, chief research officer at the Santa Monica-based Milken
Institute, said California would weather a soft landing by China just
fine. "But it all depends on how much China's economy will slow," he
said.
Elsewhere in the U.S., American companies are already experiencing
China's weakness in their financial results. Slowing construction in
China contributed to a disappointing first quarter for heavy machinery
maker Caterpillar Inc. Auto manufacturers including General Motors Co.
and Ford Motor Co. are revising once-lofty expectations.