Chinese economy shows the indication that it stops growing.

Chinese manufacturing activity shrank for the first time in seven months in December. Markit Purchasing Managers’ Index (PMI) that signifies national growth rate was at 49.6, just below the 50 level. 50 level is standard rate. If it is higher, it means its economy continues growing and its market is expanding. On the other hand, if it is lower, it means its economy is shrinking. Chinese economy, which is honored as “factory of the world” is gradually declining in power. As the response to this, Chinese central bank surprisingly cut interest rates to 2.75% for the first time since 2012 aiming recovering the economy.

What makes China stop growing economically? The answer is not said in this article but I think it’s because of soaring cost of labor. In those days, China has attracted many foreign companies by making use of the cheapness of cost of labor and activated its economy. In fact, Japanese companies also has constructed their factories. When we look at products that is sold in Japan, they often have tags that is written “made in China”.

What makes cost of labor in China soar? The reason we can guess is improving of the life standard in China. It is natural as we think, so China stands on the stage that it have to get new temptation except the cheapness of cost of labor. On the other hand, because Japan is much depending on Chinese market, it is needed to find new markets with making sure of the economic situation in the world.