Didn't need to hear this while on summer holiday

Should the industrial laser community be concerned? I think so. China is a major market for most of the large laser and laser systems suppliers.

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Here are a few media headlines I read on Tuesday and Wednesday (August 11-12, 2015):

  • China’s Currency Slides After Beijing Announces Devaluations
  • Global Selling Shows Concerns About China’s Weakness
  • World Stocks, Asian Currencies, Commodifies And Government Bond Yields Are Heading South
  • Devaluation of the Yuan Causes Global Heartburn
  • Strains Mount As Chinese Devalue Yuan
  • Cheaper Currency Has Global Impact
  • Beijing Pulls U-Turn In Adjustment Of Yuan
  • China Move Hits Bottom Line
  • China’s Currency Move Clouds Its Policy Goals

Do you get the picture? If not, let me quote from The New York Times: “After China shocked investors on Tuesday by devaluing the country’s currency, a wave of selling swept the globe. The price of oil plunges, the currencies of other countries tumbled and stock markets skidded on every continent.” A more recent comment on devaluation can be read here.

Should the industrial laser community be concerned? I think so. China is a major market for most of the large laser and laser systems suppliers. Each time the Chinese government has interfered to strengthen its shrinking economy, international equipment exporters have felt the effect negatively for the most part. And, in a series of laser company management comments after posting their latest quarterly financials, it is obvious that events in China will have an effect on third-quarter-and-beyond results.

I wouldn’t be writing this blog if China was a less important market. It’s too big to ignore and whether advantages to Chinese manufacturers enhances their competitiveness in the global marketplace means that these manufacturers will purchase more capital equipment is an issue that only time will tell. If on the other hand cheaper Chinese laser products flood the market, impacting other global suppliers is a different story.

Whatever—China’s government tinkering will give some corporate executives and market investors sleepless nights for a while.

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