Increasingly, the Chinese economy has grown in importance and stature. Economic growth globally certainly depends on the Chinese economy to a greater extent than ever before.
The reason is twofold: the first is that the Chinese economy is a large buyer of resources, which impacts many nations around the world; and the second and new dynamic for economic growth globally is that the Chinese economy is now becoming more domestically oriented.
Both characteristics of the Chinese economy are important for economic growth-not only within that nation, but even here in America.
The Chinese economy can certainly have an impact on many American companies, from resource firms to companies selling goods into the Chinese economy as the domestic market continues to grow.
Recent economic data have shown that there appears to be a decrease in demand globally, as manufacturing activity within the Chinese economy dropped for the month of May, which marks the first drop in seven months.
The HSBC/Markit Purchasing Managers' Index (PMI) during the month of May dropped below the all-important 50 level down to 49.2. A PMI reading below 50 means a contraction in activity. (Source: "HSBC China Manufacturing PMI," Markit Economics web site, June 3, 2013.)