Economy: Benefits Of Globalization II

Today we got news that "China’s May exports and imports increased at more than double the pace analysts estimated" (bloomberg). Overseas shipments climbed 15.3% from a year earlier to a new record. Imports rose 12.7%. Bloomberg reported further "that trade with the U.S. rebounded, supporting growth in the world’s second-biggest economy as domestic demand slows".

Last week we also got news that the U.S. service industry, which represents the lion`s share of the U.S. economy, grew a bit faster in May (calculatedriskblog.com).  And the Federal Reserve Bank wrote in their "Beige Book" that overall economic activity expanded at a moderate pace (calculatedriskblog.com).

It looks like the U.S. and China, the world`s leading economies, are supporting each other and both nations benefit from globalization and the increasing exchange of goods and services. The data suggest that trade between the U.S. and China is lifting income and wealth in both countries.

The symbiosis between America and Asia should also benefit the rest of the world. Especially nations that are export oriented like Germany should also gain rising exports. I reckon therefore that the growing global trade will help Europe to mend. Continuing growth in the U.S. and China in combination with a healing European economy could kindle a strong rally on the stock markets in the coming months.