China’s Exports Recovery - We Don't Buy It

China’s exports are likely to grow in the fourth quarter of this year, according to a recent forecast published by some Chinese and foreign institutions. However, at Trading Economics we don't buy it. It’s either a matter of miracle or bad accounting techniques.

Indeed, exports, which have been the main driver of the Chinese economy in the past decade, fell for the ninth straight month in July as the global recession is still cutting international demand. In fact, overseas sales slid 23% in July from a year earlier, 21.4% in June and a record 26.4% in May.

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Moreover, China will need to wait a long time for any improvement in its top two overseas markets since unemployment rates are still rising in Europe and in the United States.

In addition, some Chinese economists have been saying that the exports driven sector of the Chinese economy may recover due to a massive stimulus package. But how is that possible if the government money has been mostly designated to support construction activity rather than provide help to distressed exporters or households.

Disclosure: No positions

Comments

[jjp:]

Yep, Walmart isn't doing great, so China cannot either. As the article points out, exports need a destination and it is no longer there. They would have to send stimulus money to the U. S. Consumers.
I'll be looking in the mail for my envelope of Yuans. :)

Aug 13 10:04 AM

[dybydx:]

o rly? i m totally buying into this "recovery". like everything i use is made in china. from my t-shirt to laptop, everythings got PRC stamped on it.

not too sure if their GDP numbers are reliable, but the price tag at wal-mart is always low prices. cheers!

Aug 13 10:30 AM

[rlirph:]

China should send every US citizens a stimulus check! With the money we can buy more Made-In-China products...

Aug 13 10:55 AM

[Alphameister:]

China's exports are already recovering on a seasonal basis, and by late this year and early next year, comparisons will become a lot easier. Over time, demand from other nations that have the ability to grow will supplement expanding domestic retail demand, enabling the manufacturing and export sectors to revive.

Aug 13 12:24 PM

[Tony Daltorio:]

Yes, let's just ignore the huge percentage of Chinese exports that go to other emerging economies..........

Aug 13 02:30 PM

[johnqh:]

Is the author saying that US consumer consumption will continue to dive?

When US consumption stabilize and recover (we have a lot of indicators for that), wouldn't China's export to US stabilize and recover?

It does not mean that it will go back to 2007/2008 levels (which will take several years). However, like all recession, all charts have a bottom.

Aug 14 09:03 PM