Global Macro: China's Ripple Effects
NEW YORK ( TheStreet) -- The Chinese economy continues to turn out underwhelming data and show signs of a weak recovery.
Urban fixed investment, a main economic driver, came in weaker than expected Monday, followed by a miss on the Chinese industrial production measure. It doesn't look as if China is in free-fall mode, but recent data haven't been promising.
Also, cash flowing into China on speculation that the yuan has further room to climb could be damaging. The yuan has risen lately, and the Chinese central bank has its hands tied somewhat. If it cuts rates and depreciates the value of its currency, it invites more speculative flows into Chinese property markets, already at record highs. A property bubble could be disastrous for China, but the country needs more growth.
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