BEIJING: Investors monitor a display showing the Shanghai Composite Index at a brokerage in Beijing. From Australia to Zambia, Chile to Indonesia, the pain of China’s sharp economic slowdown is being felt in the form of depressed commodity prices, elevated unemployment and shrunken home prices.
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China’s economic troubles have dropped on the doorstep of a sun-weathered house at 18 Edgar St. in Port Hedland on Australia’s northwest coast.
Four years ago, the 50-year-old home, fabricated from cheap asbestos cement, sold for the equivalent of $1.3 million. It’s now for sale again — recently priced at $310,000.
What happened to $1 million in home equity? It vanished down the China sinkhole.
From Australia to Zambia, Chile to Indonesia, the pain of China’s sharp economic slowdown is being felt in the form of depressed commodity prices, elevated unemployment and shrunken home prices in towns such as Port Hedland that once thrived from supplying materials to Chinese factories.
China’s deceleration isn’t surprising. The extent of the collateral damage is. And it’s raising fears of a global recession.
Noting that the harm from China’s woes has been worse than expected, the International Monetary Fund has downgraded its outlook for worldwide growth this year to 3.1 percent, which would be the slowest since the recession year of 2009.
Citigroup has warned of a possible new worldwide recession caused by China’s slump. So has the Organization for Economic Cooperation and Development.
China has an outsize effect on the world because it accounted for 30 percent of global growth last year, up from just 13 percent a decade earlier, according to the World Bank. The impact is seen in Standard & Poor’s GSCI commodities index: The index, reflecting prices of 24 items, including crude oil, copper and cattle, shrank 19 percent from July through September.
