The European Mess Is Contageous

MacroBusiness looks at activity in China (h/t nc links):

…While shipping rates were affected earlier this year by an expansion of the fleet that plies the Europe-China route, stable capacity since August shows the latest drop is a result of weak demand, Kapoor said in an interview today. U.S. deliveries are faring better than those to Europe, he said.

Earlier in the week Xinhua reported the results of a very gloomy survey among Chinese exporters:

A majority of Chinese exporters saw shipments to Europe decline in the past few months as the eurozone sovereign debt crisis weighed on external demand, according to newly released survey data.  About two thirds of nearly 600 companies surveyed from Nov. 4 to Nov. 7 said their exports to Europe had dropped in the last few months, with 35 percent reporting significant falls, said Global Sources, a trade information provider, in a statement.

 

It said 22 percent of the firms reported exports remained stable and 12 percent reported growth in shipments.  Nearly 40 percent of the companies surveyed expected further decreases in exports to Europe in 2012, while 29 percent anticipated more shipments, said the statement.

Whatever slowdown China is seeing, Germany is also seeing.  I think this is the pickle Merkel is in in Germany.  The economy still feels fine to ordinary Germans, even though data shows things are slowing down.  As the Euromess comes to a head, the German economy will be in recession.  Any shock coming from Euro fallout will only make things worse.  If China sees its own slowdown, bad real estate loans there may be harder to paper over.  I'm afraid we'll see the same problems here.