China Hype Doesn’t Help

Derek Scissors / April 30, 2009

A Wall Street Journal headline today adds to a chorus of claims that China’s stimulus efforts are benefiting American business and the world economy. As with previous claims, however, there’s little substance.

The WSJ article cites Caterpillar reporting China sales of excavators have returned to pre-crisis highs, concurrent with intensifying Chinese government spending on rail and roads. So far, so good. Goodyear, though, merely sees promising signs for tire sales. Yum Brands — known for KFC and Pizza Hut restaurants among others — is continuing its rapid expansion in the PRC but, of course, this has nothing to do with infrastructure stimulus. And that’s all for the gains for U.S. business. (more…)