Effect of US Slowdown on Chinese Economy

For more details see this post – Effects of US economic decline

China certainly exports alot to the US. Exports to US totalled $295bn in 2007 (they were 32% of exports

US trade with China TOTAL

•  US exports to China $58,340.1m
• Chinese exports to US $295,817.6 m
• Trade Deficit -$237,477.5m

Source US Trade

However, US is not the only trading partner of China. China has many other markets.

Also with the Chinese economy growing at around 10% a year. A fall in exports to the US, may just slow down growth by 1 or 2 %. This may be beneficial because it will avoid inflationary pressure in China.

The US recession, will lead to further weakening of the dollar. It will create further upward pressure on the Chinese Yuan, even though the Chinese are reluctant to do this.

Overall: The Chinese economy is growing sufficiently fast to avoid being adversely affected by a US recession. However, if the US recession spread to the rest of the world, it would be much more serious.

• Affect of US recession on China and Japan