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While the OECD’s economies continue to stagnate, the situation in China is less clear. Chinese exports, which had been the mainstay of the economy, are now down by 26 percent from last year. To counter this drop, the government has launched a 1-year $700 billion stimulus package that is aimed at strengthening the country’s infrastructure and keeping people at work.

Last week the government reported that May’s industrial production expanded by 8.9 percent and insists that GDP continues to grow at a respectable 6 percent. In May China’s oil imports were up by 14 percent over April, iron ore by 33 percent, aluminum oxide by 16 percent and coal and copper by 148 percent. While increases of this size would seem to indicate a robust economy, many believe the imports are largely opportunistic buying for strategic stockpiles while world prices are low.

Skeptics point out that Chinese electric power consumption dropped by nearly 6 percent in May. They note that the declines seem to be worst in areas that have large numbers of factories heavily dependent on electricity.  Many are looking to China and India to keep growing and lead the way out of the economic slowdown. The next few months should tell us more about how far China can distance itself from the troubles of the OECD countries.