Prospects for global GDP growth have cooled slightly since the beginning of the year. Japan, China and a number of developing countries were the main drivers of this deterioration. A slowing China appears to already be negatively affecting levels of global trade and industrial production. The Chinese PMI has fallen below the neutral 50 mark, to its lowest levels since mid-2013, indicating one likely source of global trade weakening.
We reported last quarter that global exports seemed to be growing once again after of their recent three-year period of weakness. This growth was a result of the recovery in Eurozone, but global export levels appear to be slowing once again. With the Eurozone and Asia comprising approximately equal proportions of global trade, further Chinese weakness is likely to offset any ongoing improvement in the Eurozone.
Source : AEW Europe