It turns out the China was not as immune to the worsening global economy. Some Chinese policy makers have been saying that "... China would not be affected by the Economic Tsunami." While China may have not been toppled by the initial tidal wave, it is more than evident that the flood waters have reached its shores.

China is much better off than many nations. There is still growth in most sectors across China today. However, this quarter’s growth is the slowest growth that China has seen since the outbreak of SARS in 2003. While Washington policy makers are working overtime to try to keep the USA from sinking any further in the economic tsunami that has affected the world over, China seems to be making several of the same moves.

China has just announced that they will increase the tax rebates to exporters on over 3400 different products. This makes up about ¼ of China’s exports. While some rebate increase may be minimal some are much greater. The tax rebates in China are a very important. Most factories run their products at a near loss and rely on the rebates to make money. It is obvious that China is taking preemptive measures to stimulate the economy before it slides out of the black and into the red.

Domestic purchases in China are still strong. However, imports are down across the board. It is only a matter of time before domestic spending slows as people start to lose their jobs. One of the hardest hit sectors is the toy industry. There have been several very large companies that did OEM work for several large western toy brands that have just closed their doors and ran for the hills.

In the last year China’s manufactures have suffered several setbacks. In recent memory: the lead paint on toys, tainted pet food, and now tainted powdered milk. The trust level of Chinese products has suffered the most. Without trust of a product, the consumer will think twice before purchasing it.

China’s policy makers are making headway on cleaning up some of its PR issues. One thing is for sure: it will take some time for Chinese made products to be trusted as high quality products again.