China's role in the global economy also means that China cannot isolate itself from the global economy and as the world has been down-turning, so has China. A recent article in the L.A. Times points to a downturn in China's exports for January, dropping 17.5% worldwide. As worldwide consumption is down, so will be the people buying up Chinese goods. On the flip side however, China's imports dropped 43%, which points more towards China not "helping out" in the world wide economic downturn. China is purchasing less from the rest of the world, according to the article, mostly in the form of rawmaterials.
The economic impact in China could mean an even greater decrease in exports. If China has decreased its use of external raw materials, it could relate to less processing and turn around of Chinese exports. January normally marks a lull in Chinese exports as many Chinese businesses shut down for the New Year celebration.
The shut down allows for migrant workers to return home. As those migrant workers are coming back to the cities they are finding fewer opportunities for work. They have also experienced a decrease in those returning to the cities, citing the lack of opportunities. Other news points towards increased unemployment in China as well.
China, now playing a vital role in the world economy, is bound to feel the effects of the world wide downturn. How China reacts to protect its economy and its people could tell a lot about the future of the CCP. China's socialist flavored capitalism is one designed to provide for the people and in the Reform years has done a great deal to lift the people out of poverty (some 300,000,000 of them). China's participation in the global economy represents 1/4 of the world's population.
How China regains its ability to work with the current downturn and the lack of need for raw materials for exports will be a key factor in its return to a prosperous economy. But, remember, China is not purchasing imports, just raw materials. Therefore, the world economy, in its downturn and inability to purchase electronics or big ticket items has limited China's, need for raw materials. China has not returned orders and purchased imports providing the cash needed to stimulate other economies. If China in its abundance would increase imports money could translate for smaller electronics and items at the holidays to increase China's economy. Globalization requires that countries work together to achieve an understanding that their economies our interdependant on each other. Hopefully, China would not suffer, such an economic downturn that their products would increase in price.
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