China feels effects of financial woes in Europe and U.S.

China is feeling the effects of the financial crises in Europe and the U.S. Factory production shrank in November, the first time in almost three years and labor unrest is on the rise as employers are forced to downsize. In sharp contrast to the take-it-or-leave-it attitude that prevailed in the past, Chinese suppliers are now willing to negotiate. Chinese exporters have also seen a 10 to 30% drop in orders because of low demand in Europe and the U.S. The Asian Development Bank has already trimmed down its forecast for China’s growth in 2012 from 9.1% to 8.8%. In the event that Europe and the U.S. contract at levels similar to those in 2009, China’s growth will be a slow 6.8%. But some experts believe that China’s economy is now less dependent on exports as investments and domestic consumption continue to rise. Compared to 40% in 2007, exports now make up about 25% of the country’s gross domestic product. (December 6, 2011)