Gavekal Capital: Australia Employment Suggests Further Slowing in China

Friday, February 14, 2014

Australia Employment Suggests Further Slowing in China

The unemployment rate in Australia increased again last month to 6% signaling a further slowdown in Chinese GDP growth. The logic here is that as China moves away from an investment led growth model (that requires a large amount of natural resources) its level of overall growth must necessarily show. Since Australia is one of China's largest suppliers of natural resources we should see the effects of slowing demand for commodities show up in some of Australia's employment statistics before or coincident to actual slowing in China's economy.

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