China's Leading the Way Out of Recession

SANTA BARBARA, CA & SHENZHEN, CHINA-With a Q3 economic growth rate of 8.9% and an even stronger industrial growth rate, China appears to be surging far ahead of the pack in emerging from the global recession. At a late October conference in this California city on Asia and the Global Financial Crisis, Federal Reserve chairman Ben Bernanke commented that Asia in general and China in particular appear to be leading the global recovery, with recent data indicating a strong rebound is well under way in the region.

But analysts warn that the spurt may be short-lived unless North America and Europe significantly raise their level of imports from the Asian giant. According to official government figures, China’s exports were down 15.2% in September from a year earlier. The good news in this is that forecasters had anticipated a 21% drop.

Nonetheless, the year-over-year decline represented bad news for US and European investors, who in recent years had poured a lot of capital into building large distribution centers, the majority of which served primarily as way stations for Chinese manufactured goods that were wending their way to overseas markets. Though more recent construction had included a sizable number of buildings aimed at meeting China’s internal distribution needs, the global economic downturn ate into tenancy at domestic distribution centers as well.