Stanley Black & Decker CEO on China's credit crunch
There's lots of reasons why traders don't like China, principally that it is a Black Box: not only is there economic uncertainty, there is a lack of transparency. These issues have been around for a long time.
But a more recent issue has been an apparent credit crunch.
Authorities have been vague about what is going on, but take a look at this comment from Stanley Black & Decker CEO John Lundgren. who commented on what was going on in China on Friday morning's conference call (this is a raw transcript).
"What we're really finding in China as we sit here today is there is a deceleration going on in the market and there is credit crunch is going on. And we're starting to really see a very tight credit situation with the channel. So it's not as much of a loading issue, as an ability of the distributors to finance purchases to meet what could be growing end-user demand," Lundgren said during the call.
(Read more: EM turmoil an exclamation point to choppy 2014)
"But with the issue in the channel, it's almost impossible for the distributors to buy their product that they need and it's a really interesting phenomenon going on in China right now. And if you have been following the news over the last couple of days, there's been some indication from the central bank in China that they are beginning to realize that there is a credit crunch with the small to midsized businesses and we're seeing that."
In plain English, Mr. Allan is saying that the distributors of SWK's products are having trouble getting credit to finance their purchases.
This is a real-life example of a real company running into problems with its distribution channel in China.
—By CNBC's Bob Pisani.