Tom Stieghorst
Tom Stieghorst

For better or worse, we live in a world where a butterfly sneeze in Africa can lead to a typhoon half way around the world.

So the slowdown in China's economy is a big deal not only for residents of Shanghai and Beijing, but for countries and industries around the world.

Apple Inc.'s surprise reduction in its sales forecast, the first in 15 years, was attributed to a sharper than expected slump in Chinese consumer activity and has been called a canary in the coal mine by some economists.

Factories in China are running at the lowest level in three years and economic growth fell below 6.5% in the fourth quarter, the weakest since the 2008 financial crisis.

Cruise companies, and indirectly cruise sellers, are affected in two ways. Most obviously those cruise lines doing business in China may have fewer customers who are less willing to pay high prices to cruise. That's the same dynamic that's hurting Apple prospects in China.

Of course, Chinese consumers have four or five domestic alternatives to the iPhone, whlle China's domestic cruise industry is in its infancy.

The bigger impact will be if China's slowdown is the harbinger of a worldwide economic retreat.  So far the U.S. economy is humming, with a net of 312,000 jobs created in December. But many economists question how longer that can last and investors since October have expressed doubts.

Cruise stocks have fallen in the last month, with Carnival Corp. falling the most (11.8%) and Royal Caribbean Cruises Ltd. the least (5.9%).

It's no secret that whatever else may be going on in China, President Trump's tariffs are contributing to slower export growth and lower investment there. The president's game of trade chicken may yet pay off in important ways such as less Chinese appropriation of intellectual property.

But in the meantime, the world economy is at risk, and even if trade peace breaks out, the damage may be already done.

JDS Travel News JDS Viewpoints JDS Africa/MI