Global Market Watches as China’s Manufacturing Stocks Thrive, While Its Industry Falters
Economists are optimistic for China’s manufacturing industry despite declining production rates, based on a steady rise in market shares. The latest numbers show the Hang Seng Index is up by 1.1 percent at 21,673.21 points, a recent high. The latest financial numbers come on the heels of the industry’s eighth consecutive month of slow production. Experts believe the slight increase in market shares is based on the expectation that the Chinese government will provide stimulus relief for the waning sector. Officials have not yet responded regarding plans for support.
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Still, the promising financial fracture that broke up China’s otherwise dismal manufacturing news may not be enough to stabilize the world’s second-largest economy. Global players may see this as an economic prospect for growing their own manufacturing industries.
The widening hole created by China’s manufacturing slowdown has created opportunities for other, smaller global economic powers, such as France’s manufacturing and service industry, to fill the opening in China’s absence. Furthermore, global juggernauts such as those in U.S. manufacturing, will likely rise to meet the demand as reports show U.S. factories receiving more trade orders for high-end products. Analysts believe these factors will put additional pressure on the Chinese government to make a decision regarding further economic action.
Despite manufacturing woes, China has set its sights on 7.5 percent economic growth for 2014. However, this goal is already less than the economic growth rate for 2013, suggesting China’s attention to, albeit lack of action toward, a possible crunch. Economists, as well as consumers, will likely pay close attention the Chinese government’s next move, which may affect spending and stock futures. Currently, manufacturing market shares seem to be closely linked to any impending measures. China may see weaker growth and lower economic numbers if the manufacturing industry continues to narrow at the production line. [/show_to]
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