Chinese Exports Collapse Leading To 2nd Largest Trade Deficit On Record

Zero Hedge ^ | March 7, 2014 | Tyler Durden

[SatinDoll]

Plenty of excuses out there for this evening's collosal miss in Chinese exports (-18.1% YoY vs an expectation of a 7.5% rise) mainly based on timing issues over the Lunar New Year (but didn't the 45 economists who forecast this data know the dates before they forecast?)

This is a 6-sigma miss and plunges China's trade balance to its biggest miss on record and 2nd largest deficit on record. Combining Jan and Feb data (i.e. smoothing over the holiday), exports are still down 1.6% YoY - not good for the much-heralded global recovery. Exports to the rest of the BRICs were all down over 20% but no there is no contagion from an emerging market crisis.

Even when the trade deficit was last this large, economists were more accurate - this is the biggest miss on record...

Seasonally-adjusted the data is stunningly bad...

*CHINA FEB. SEASONALLY ADJUSTED EXPORTS FALL 34% MOM *CHINA FEB. SEASONALLY ADJUSTED IMPORTS FALL 0.4% MOM

and non-seaonally-adjusted

*CHINA'S FEB. EXPORTS FALL 18.1% FROM YEAR EARLIER (vs +7.5% expectations)

The excuse...

"The Spring Festival factor caused sharp fluctuations in the monthly growth rate as well as the monthly deficit," Customs said in a statement accompanying the data.

Chinese traders followed their "business habit" of bringing forward exports ahead of the holiday, and focusing on imports immediately afterwards, it added.

But, our simple question is - didn't they already know this when applying their forecasts? If so - then why a 6-standard-deviation miss?

At least they didn't blame the weather?!!

It seems the massive imports of copper - to act as collateral for all the shadow banking loans - also did not help as imports surged...

*CHINA JAN.-FEB. COPPER, PRODUCT IMPORTS 915,000 TONS

All that apparent demand and yet the price is collapsing - not good for the credit unwind

And what does it say about the US that our trade balance with China collapsed MoM...

[ansel12]

I don’t like that chicken business, my impression of China is that they have no concerns about honest business or conscious, or morality, the only restraint is which option is more profitable.

They will sell or do anything, without any qualms, they will look at the money only, if it is more profitable to not poison you, or not to poison you but a little, or not to poison you at all, it will be decided on their business plan, there will be no personal “hangups” interfering.

When Chinese business looks at business, it is purely based on money, there is no personal honor or codes, or Christian ethics involved, or even ignored, they are unaware of such concerns.

[A CA Guy]

We have the most conservatives of any state, but there is also the most liberals of any state here as well.

[dennisw]

I have seen smog headlines recently, but even at that, it's still underplayed. To me it's surreal that we're having this "war on diesel", for example, when the air and water are cleaner than they have been in decades, even a century in urban areas.
Then I look at the MODIS satellite pictures of China, and it's like some kind of horror movie! Yet, it's ignored or glossed over. What is with that? Somebody tell me.

I frequent a site/forum that has nothing to do with politics but has a small subsection where members discuss anything. By a 3 to 1 ratio people buy into the   eco-lies you mention. I post anti-EPA material and have at least some people thinking

But what you write above is the common sense I post. Americans are spoiled and have lost perspective on how clean this nation is. Our cities used to have horse shit on all the streets. That was pretty funky in the summer. Bred lots of flies too

[4rcane]

the problem with China’s economy is that they’re devaluing their currency by pegging it to USD. Noticed that devaluing their currency didn’t lead to export growth that some ppl still stubbornly believe in. If their currency was allowed to rise, they will be able to enjoy the fruit of the labor

[PGalt]

Interesting and interesting comments there and here. Thanks.

[dennisw]

We have the most conservatives of any state, but there is also the most liberals of any state here as well.

I lived and worked in your wonderful state a total of 19 months. I saw many different areas. I only had good experiences and only have good memories. This was all done before 1987 so I saw California at its best

[dr_lew]

It seems there is no process or product innovation we would not ‘share’ with our Asian friends for the benefit of saving a few pennies in production.

A couple of years ago I noticed some kind of doodad tee markers at the golf course for some tournament or something, and looking at one, they were marked Made in China, of course. The thing is, they were made of rustic looking wood. I thought, boy, I'll bet that wood came from the U.S.A, was shipped to China, made into tee markers, and shipped back. I still wouldn't doubt it.

[A CA Guy]

Regan had the amnesty and bunches of second grade drop outs from everywhere came here to stay and go on our dole.

In another blessing of this amnesty there were many that falsified records for money though never here that came here after the amnesty to also get on the dole.

Then our current governor in the 70s allowed unions in government and now we have many billions in unfunded retirement debt that can't be paid to the overpaid government employees.

Hey, at least you can see the cast of Modern Family in a local mall filming like I did today.
Woop D Doo!

[DB]

The Chinese government wanted the fasted path to wealth possible at the expense of the longer term. They knew their days were numbered watching the rest of the world throw off the communist overlords and this was the way to extend their reign. It won't surprise me if the Chinese people's rage turns inwards instead of outwards for what the Chinese authorities have done to their future.

[Captainpaintball]

Right. Neither will I. I have refused Christmas gifts that were made in China. Anyway, once those businesses that bought those factories go out of business, or leave the factories behind, China gets them ready to go for flee, I mean free. I think this would be especially helpful, not for novelty gifts like toys or even furniture, but for auto plants or computer lines

What is stopping them from just seizing it once things start to really go south in this country? Or even their country?

[dr_lew]

In another blessing of this amnesty there were many that falsified records for money though never here that came here after the amnesty to also get on the dole.

Soooooooooooooooooo ........... OK, I get it! Phew!

[Eagles6]

Drop shipping from suppliers. They hold your money in hopes that prices from the supplier will drop due to low demand. Looks like the case maybe.

[dr_lew]

Well, I just meant to say that people are hunkering down and spending as little as possible.

[A CA Guy]

Yeah, but people have to spend for food, their kids and stuff no matter what. So they are borrowing, digging into savings and selling stuff to survive.

Our own 5 year old had an accident at school. Cut his scalp in the hair line. We have non-Obama effected PPO for him.
First to doctor and paid that and then had to go to a plastic surgeon because it was too deep to fix in the office.
He's fine now but $1000 later WITH INSURANCE the lesson is you have expenses in life despite any attempted hunkering down.

[A CA Guy]

A third of all welfare and now 90% are born by welfare in this state. We have Chinese women coming here to birth kids to get on the dole. Many were caught and sent back for not being Latino I guess.

[2ndDivisionVet]

[dr_lew]

At some point, things are going to get serious :-(

[ansel12]

I don’t think that applies to the kind of products I mean, things like new Fenix lights, and new models.

[PA Engineer]

They must war and grab land and materials or die at this point IMO. But they have not learned to live clean yet and destroy everything in their path (again IMO).

Demographics. The one child policy is hitting earlier than most predictions. The poplulation pyramid is inverting. What does it mean to be a son in this scenario if you have to support multiple family members. Imagine a couple in the same situation. There are no safety nets in China.

[Eagles6]

I don't know. Worth checking out. If they're coming from only one supplier maybe not.

Doesn't look good anyhow. This all has the looks of WWIII coming up.