Posted on 10/31/2018 9:30:08 PM PDT by BeauBo
New export orders contracted for the fifth month in a row in October, to 46.9 from 48 in September. Imports also contracted for a fourth straight month, indicating weakening demand within China, while the decline in manufacturing employment accelerated. Non-manufacturing activity, dominated by the service sector, also slowed in October... We expect a worse growth slowdown in spring 2019.
(Excerpt) Read more at scmp.com ...
I’m inclined to believe your assertions that this will not spell economic doom. After all, the u.s. news media treats nine percent growth instead of ten percent growth as if it were ruinous. OToH, i think you’re downplaying it a bit. Our trade deficit with them is near ten percent of their entire GDP. And the major source of their fluidity. And I don’t buy for a second that they’re only selling junk to us but high quality goods to everyone else.
I UI
Nothing flashy, but I’ve always liked the intros to “Life In The Fast Lane” and “Johnny B. Goode”.
Not sure why, by these lines right after the intro always made me smile:
He was a hard-headed man he was brutally handsome
And she was terminally pretty
$45 billion in a $20 trillion economy is 45/20,000
or 9/4,000 or ~1/4 of 1%. Basically a rounding error.
Particularly considering the US onshore growth as we replace cheap sh*t from China.
As I reviewed the list of harmonized tariff numbers, the $267 billion was products like air plane tires.
Consumer products did not seem to dominate or even appear on the list.
What the heck does that have to do with China?
I consider you a quisling for making money off the backs of the US worker. When you import product from the third world you are importing their standard of living. In this case lost opportunity and quality of life is pushing decent Americans into the Democrat camp for no good reason except for you to make a buck.
He’s a traitor.
If we get into a shooting war with China all of you Free Traitors™ are fair game.
China’s ghost cities are metaphor for their fake economy.
After re-reading, I think I may have misinterpreted your point, when you said: “China will not react like everyone else is forecasting”.
I interpreted it that they would have surprisingly damaging countermeasures they would enact against the USA.
Now I wonder if you meant simply that the Chinese economy would not be as badly hurt by US tariffs, as many here have speculated.
Its possible they may be able to print more money, and keep their economy stimulated. Time will tell. 2019 will probably reveal if it is serious or not.
One thing I noticed in your analysis (from your link), is that you seemingly discounted the effects of trans-shipments into the American market. In one place you say that the American volume is not such a big part of Chinese exports, and that the high value products go to Japan, Korea and Europe. But elsewhere you point out that much of these products are ultimately shipped into the US market, through the back door.
It is important to note that there has been an unprecedented amount of activity during the Trump Administration, re-negotiating trade deals. NAFTA was re-negotiated after a quarter century. New trade deals were also agreed with the EU, Japan and Korea. Unprecedented. Negotiations on one such deal typically run several years.
One thing is in common with all those deals - new mechanisms to throttle trans-shipments of communist Chinese products into the American market. There was some arm twisting, but overall, folks signed up to this program pretty quick, because of the growing fear of communist aggression, and the consensus that the International community needs to manage this growing threat.
Those trade deals will likely be ratified in the Senate, and go into effect during 2019.
Yes. What I meant was that the Chinese economy will not be as seriously affected as everyone is speculating.
To really hurt China via tariffs, you would need to halt ALL imports to the United States from everywhere. China is the manufacturer of the world.
More importantly, a renegotiation along the lines of fairness, like what Trump is suggesting would be a welcome solution. Most of the Chinese factories that I work with welcome it.
Why isn’t it implemented?
Because China has other arrangements with other nations that puts high tariffs on inbound American products so that inbound products from Japan, Korea, Germany etc, would have a competitive advantage. That has to end.
But will need to renegotiate with all the other trade partners with China.
Just now being reported that President Trump has told his cabinet to start drafting terms for a trade deal with China.
Markets will like to hear that.
Welcome news. All trade deals must have advantage for America. That’s why I love Trump. No long are trade deals cut with the Clinton’s or Obama walking away with pallet loads of personal cash.
“Markets will like to hear that.”
...And I think that’s just why he’s saying it now- for the elections.
I firmly believe he will do what’s neccessary re China. That’ll be easier for him if the Dems don’t get the House majority...
I’m no market advisor, but for what it’s worth my opinion is that no deal is in sight: China just won’t deal unti;l they have to.
[Just now being reported that President Trump has told his cabinet to start drafting terms for a trade deal with China.
Markets will like to hear that.]
That's right! This country had had all the cards from the get-go and every President before PDJT failed to see that.
So glad to see President Trump playing hardball with the Chinese. WINNING!!!
It will not only have an effect on China:
One reason the US economy seems to be booming right now is a surge in imports. Companies are rushing to build inventory ahead of the 25% tariff on Chinese goods that takes effect January 1. Coming on top of usual holiday season stockpiling, it is jamming ports, highways, and warehouses—generating many jobs in the process.
That’s all good right now, but those truck drivers and warehouse workers will no longer be necessary once the shelves are stocked. Working down that inventory will take months, at least, and the resulting slowdown could ease the economy into recession next year.
http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/TFTF_Oct_26_2018.pdf
This newsletter by John Mauldin is as well of interest:
Red Hot China Mailbag
http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/TFTF_Oct_12_2018.pdf
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