The factory lights are on in China
There seem to be signs this morning that Chinese manufacturing is coming back to life. Bill Radke talks to Marketplace's Scott Tong in Shanghai about why things might be picking up and more about the China's stimulus plan.
Workers check cell phones on a product line at a factory in Chengdu of Sichuan Province, China. (China Photos/Getty Images)
More on International, Asia, America's Financial Crisis
TEXT OF INTERVIEW
Bill Radke: As I mentioned, there was a little optimism in the markets shining from across the Pacific today. Asian markets were up, led by China's Shanghai Composite Index, which zoomed up more than 6 percent.
Marketplace's Scott Tong is with us now from Shanghai. Scott, why all the investor confidence?
Scott Tong: A couple reasons today, Bill. Number one, we had some data that's suggesting that China's factories are kind of coming back to life. The exports are falling off a cliff here in China, and these new numbers suggest that the orders are starting to come back, that factory output is starting to turn around. So maybe a sign that China's bottoming out a little bit. The other news out of China is there are rumors that China's great big economic stimulus package is going to get even bigger. They may super-size this stimulus package, which already is more than $500 billion big.
Radke: So is there an experts' consensus? Is this a real recovery or irrational exuberance?
Tong: You can find a hundred economists on either side of that, I think. On the optimistic side, you have this data and some data about power use, that people are turning lights back on and factories back on, that there's starting to be a little bit of life here in manufacturing side of China's economy. On the other hand, the big question is, what's happening to the rest of the world? If the rest of the world falls off a cliff -- Japan looks like that's happening, we know what's happening in North America and Europe -- than all bets are off for what's happening here in China.
Radke: OK, and if China's economy does firm up a bit, what could that mean for the rest of us?
Tong: Well, it could mean a little bit. Frankly, China is too small to save the world, all the economists agree on that. It just doesn't have the rich shoppers that Europe and North America have. What it could do is bring back the commodities markets a little bit, and bring some confidence to those markets. If China indeed starts to buy more iron ore to make steel, to make more cement, to buy more copper, to make wire to put inside all of the new buildings and things that China's going to be building with this stimulus package, then the commodities markets, raw materials markets, could start to come back a little bit. That's what we'll look for if we're optimistic later this spring.
Radke: Marketplace's Scott Tong in Shanghai. Thank you.
Tong: All right Bill, you're welcome.
Comments
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From Shanghai, 01/18/2010
Truly enjoy Scott Tongs reporting. However I work and live in Shanghai. I am American. I just returned from the states and am still amazed at the lack of understanding that Americans have about China. Shanghai in particular. We are coming up on one of the most momentous events of a life time. Shanghai's Expo. Why there has not been more "on the street" reporting of the events and activity going on. Especially with "Market Place" - the huge story of China marching down the same road of the United States in the 1950's has got to be a story to be told.
The selling of Brands as education or portals into the Chinese puzzle of business.
The "facade" of the Chinese infrastructure that has no plans for maintaining an infrastructure that decays faster than they can be built.
The art scene and how the government has just recently clamped down on how and what gets viewed in museums.
What is happening in Chind, "Right Now" is so incredibly historic and going unreported and unseen by a nation, the U.S. , that cannot compete with what is does not know or comprehend.
Get me in touch with Scott Tong - James Jones jsquared4@mac.com to merely get another side of the picture as a fifty some American who was more less forced to China to remain employed and in the process has seen the future.
James Jones
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