Posted on 09/08/2019 4:15:41 AM PDT by WWG1WWA
China’s exports fell unexpectedly in August, as the trade war with the United States continued to hit the world’s second-largest economy.
Shipments fell by 1 per cent in the month after growing 3.3 per cent in July in dollar terms, and below the 2.1 per cent growth expected by analysts in a Bloomberg poll. Imports in the month dropped by 5.6 per cent, leaving a trade surplus of US$34.84 billion, according to China’s General Administration of Customs.
July’s expansion now seems like an anomaly, likely driven by front-loading as new tariffs of 15 per cent on about US$110 billion of Chinese goods that took effect on September 1. American buyers of Chinese goods subject to the new tariffs were likely to have filled their inventories as much as possible before the goods became more expensive to import.
Furthermore, the much-reported 3.8 per cent depreciation of the yuan in August failed to stop the decline in exports – despite Washington’s fears that it was being used to give China’s exporters an unfair advantage.
It is a far cry from the double-digit expansion that characterised the export machine that powered the Chinese economy for more than two decades.
China’s exports to the United States in August totalled US$37.3 billion and imports US$10.35 billion, for a trade surplus of US$26.95 billion.
The weak export figures will put further pressure on China’s already slowing economy. The central bank on Friday said it would cut the amount of cash banks must hold as reserves to the lowest level since 2007 in a bid to inject liquidity into the economy and stimulate demand.
Analysts have been raising concerns about China’s consumption levels for months, with retail sales underperforming and various bouts of government stimulus failing to kick-start purchases of big ticket items such as cars. The sluggish imports suggest the government support has yet to trickle into the real economy.
The import slump also points to a downturn in the manufacturing sector: many of China’s imports are components ordered by factories, often for use in goods for export. In the most recent official manufacturing purchasing managers’ index, a gauge of factory owners’ sentiment, export orders remained in negative territory for the 15th month in a row.
In a report released on Thursday, the Institute of International Finance, an organisation of bankers based in Washington, had said that China’s surplus over the first half of the year had hit record highs, despite the ongoing trade war.
“Meanwhile, our proxy for China’s underlying trade surplus, which controls for commodity prices by excluding oil and iron ore, was the highest ever in the first half of 2019,” read the report.
“Perhaps more surprising, given repeated rounds of tariffs, is that China’s exports remain robust. Part of the resilience in China’s exports reflects a shift in composition, away from the US and towards the euro zone and other economies in Asia, including Vietnam,” the authors said.
Top negotiators from China and the US are set to meet in early October for their first face-to-face talks since August. The US raised tariffs on Chinese goods at the start of the month, and is set to add further penalties in October and December if there is no breakthrough in their trade talks.
UNEXPECTEDLY!
How unexpected!
“China’s exports fall unexpectedly in August, as trade war continues to slam industrial economy!”
Fake news so early on Sunday Morning.
Amazing how China got suckered into providing us an incredible amount of tangible goods, in exchange for paper, the value of which could be wiped away at any moment.
Be quiet, now. No coded secrets so early in the morning.
““Perhaps more surprising, given repeated rounds of tariffs, is that China’s exports remain robust.”
‘They fall unexpectedly, and yet remain robust?’
Please knock off your statements of clarity and reality.
Remember how we are told that the ChiComs are long term planners, and how we will lose anytime we take any action against them.
China's gotten a free ride from the American middle class... that's ending.
Hey China! Do stupid things get painful results. Why don’t you try withholding your crap from us and see how much it hurts us vs you.
“Remember how we are told that the ChiComs are long term planners, and how we will lose anytime we take any action against them.”
In strategic business planning we have a saying, “The best long term plans will fail if there is short term bankruptcy. “
BOL!
Man plans and God laughs!
Japan once had that problem, too. They tried to solve it by trying to take over all of Asia.
China trades stuff for dollars and trades its Yuan for 1/7 of a dollar. This works as long as the Chinese keep some of the dollars. But they use the dollars to buy stuff. Oil mostly, but food and copper too. The question is, do they have a surplus or a deficit. And do they have enough cash-flow to hide their cash reserves.
Trump is betting that they have been over spending. They have been buying more than they are taking in. And if America cuts back on China trade, there will be a problem soon in China. The first thing will be a cut in the flows of money out of China. Then there could be a cut in the amount of oil imported. Or a gas price hike. And then you will see the Yuan devalue. The order of these may not be precise. But Trump is betting that China is nothing more than a very big Argentina.
China’s exports fell unexpectedly,Trump says yeah right winks.
China HAS been overspending. Even with their very questionable official numbers their debt is growing and they are doing “Stimulus” and infrastructure spending to help their domestic economy...which is doing worse than it’s been since the 1970’s.
They are trying to restrict the outflow of Capital by restricting money exchanges, foreign currency exchanges and the purchase of precious metals.
Though they have moved from classic Communism to Fascism that still only works for so long, and the ability of the central government to attempt to control everything will inevitably send them down the same road as Cuba, Zimbabwe, North Korea and Venezuela.
Central management usually means mismanagement.
Free enterprise is the most rapidly adaptive management in times of peace and turmoil.
I’m not tired of WINNING
You are relating the communist regime companies to a normal free market company responding to market reversals.
Nothing could be more foreign to their ideology than acknowlegment of reversals via labor layoffs. They are probably hoist on their own petard as it were. Look at the ‘ghost cities’ they built on the basis of ideology that were never populated as the party line dictated.
Either way they go to meet the challenge could be a historic monster move ideologically. They could reflexively decide the answer is war to keep control. Our enemy is embroiled in interesting times.
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