Posted on 10/14/2009 8:14:06 AM PDT by TigerLikesRooster
China's trade surplus shrinks to $12.9 billion in September
Falling surpluses point to end of China's role as `dollar recycler,' analyst says
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) -- China's trade surplus contracted in September at a faster-than-expected pace, as the gap between what the nation sells to and buys from the world continued to shrink.
Analysts said the report adds to evidence that the country will swing to a trade deficit early next year.
China's trade surplus in September totaled $12.9 billion, down about 56% from a year earlier. Median market expectations were for a surplus of $15.8 billion, according to calculations by Dow Jones Newswires.
Exports contracted 15.2% to $115.94 billion from a year earlier, a decline smaller than the 23.4% contraction in August, customs data showed Wednesday. Imports contracted 3.5% to $103.01 billion, compared with a 17% contraction in August.
On a monthly basis, China's imports have rebounded 55% from lows seen earlier this year, while exports are up 19%.
(Excerpt) Read more at marketwatch.com ...
the country will swing to a trade deficit early next year.
Hmm... a major development.
Ping!
So if China runs a trade deficit who is going to buy all of our debt?
Japan in second place, or shall we ask India?
, which would be when?
I wonder who China is importing from and what specifically they are buying.
I though they were self-sufficient.
Well, you've seen how strong diversity has made us and how well we all get along.
USA under Reagan ran huge trade deficits because the USA was growing really fast.
The same applies to China.
If you grow faster than your trading partner, you import more because you are growing and need more for infrastructure, etc.
And if your trading partner is growing slowly, they will import less (you export less).
The US trade deficit is shrinking (low growth) and China’s surplus is shrinking (high growth).
The same person who has been buying it recently, Ben Bernanke and his merry band at the Fed. They have it all worked out. They ‘buy’ the garbage debt the banks are holding in the form of crappy mortgages on houses, commercial etc. and the bank in turn buys US Treasuries. If they don’t have enough cash from doing that, Ben helpfully ‘lends’ these banks money at 0% interest and they in turn buy 3,5,7,10, and 30 year notes from the Treasury at 2-4.5% interest. The banks are happy because they are continuing to unload the crap on their books to the Fed. at full price and also can borrom money from the Fed at 0% and turn around and get good returns on their money.
It is a perfect scam, except for one thing. The world sees this is happening as Obama and the Dems run up huge deficits and our USD’s value is being destroyed. When the foreign holders of our debt start heading for the exits, it is gonna be ugly and no amount of Mad Ben’s paper printing will rescue us then.
China is importing oil, iron, gold, molybdenum, and a variety of other raw materials.
They are having inventory build-up, increasing infrastructure, and having more domestic spending.
Does China pump their own oil?
I am not buying your argument. In the 1950s we were growing much faster than our trading partners, and yet we ran large trade surpluses. Reagan ran huge deficits because in the 1980s we began to live high on the hog on massive debt.
The 50’s were a unique time because the entire industrialized world except for north and south america, was completely destroyed in wwII.
Incidentally, South America boomed in the 50’s along with the US because of this reason.
The western hemisphere was the only place untouched by world war I and world war II. The US economy only needed to retool for peace while the rest of the world was burying millions of its dead and rebuilding infrastructure using some portions of the Marshall Plan.
In my opinion, 1920 and 1950s trade surpluses during rapid domestic expansion are a result of the US being the only one left standing. As such, they are anomalies in a peace time economic model.
They are buying ALOT lumber & logs from the US and Canada.
They started buying lowgrade lumber for concrete forming. Now they are buying more 2&btr because of the exchange rates on the US & Canadian dollars.
They have also been buying Portland cement for years.
the country will swing to a trade deficit early next year.
I wonder how the supporters of Free Trade with COMMUNIST China will spin this one....
I bet my car and property that the ChiComs will still have a trade surplus with the USA
The idea that China will go into a trade deficit is based on NOTHING.
China’s surpluses, it said, peaked in 2007 at $25-$30 billion. Last month was $12.8 billion. All these so-called analysts have done is drawn a continuous down-ward trend-line into the future. The fact that China’s surplus halved during “one of the greatest world recessions since WWII” says absolutely nothing about what will happen in the future, especially if the world economy improves.
Uncle Sam is never going to have a problem selling debt. Heck, the local loan shark will lend you whatever you want without collateral, as long as he knows where you live (in case he has to send a leg breaker after you to collect). The question isn't whether whether the money can be borrowed - it unquestionably can. The real issue is what the vig will be.
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