The weakness we're seeing in the stock market today looks to have its origins overseas. Last week we received industrial production figures from China and the news was discouraging. Industrial production growth slowed to 6.9%. We can see how this compares to previous figures in the chart below, which goes back to 2013. This news by itself wasn't enough to rattle markets last week, primarily because we've grown accustomed to a Beijing stimulus response anytime things look awry.
On a longer time horizon, we can see the dramatic downward trend in China's industrial production growth. Growth has slowed to almost mid-crisis levels. This is a worrisome path for a country that is still trying to achieve 7.5% GDP growth while transitioning to a consumption driven economy.
Over the last weekend Chinese Finance minister Lou Jiwei addressed this concern, stating that the government will not make any major changes to economic policy as a ... Log in or subscribe to continue reading.