Chinese Growth and Inflation Slowing

As expected, the Q3 numbers from China show GDP growth slowed to 9% and the CPI (Consumer Price Index) for September grew 4.6% which continues the downward trend started in June. The PPI slowed to 9.1% in September. This is still a large number though.

The global economic slowdown combined with the Chinese government's interventions and some natural disasters have combined to slow growth and tame inflation. My view is these numbers are right where the government wants to be, but that further slowing of the economy will be seen as a problem. It seems a widely held view that the government needs 9% growth maintained in order to keep unemployment down.

For OPSA, we are working with our Chinese partners to reduce costs and prices now that raw material costs have come down and the exchange rate has stabilized. I'll let you know how that works throughout 4Q.