I'm on record as predicting three years ago that China's boom would come to an end within five years, as the country lost competitiveness either because the yuan shot upwards or domestic inflation raising dollar wage rates.
I didn't expect China's boom to come to an end like this picture from Brad Setser:
Man oh man. Looks like they really did make only high-elasticity commodity-like manufacturers.
And read the link. The combination of an increasing trade surplus with falling exports and imports bodes quite ill for the world economy. Especially if it give evil people like me more pernicious ideas.
But still. What's causing the export cliff dive? China isn't alone; international trade everywhere outside the eurozone seems to be falling. Can it really all be a lack of trade credit? Help!
Oh SPLAT! Imports are down their 05 levels? Exports to 07? And falling?!
Wait. What does the US look like?
Based on what I've been hearing China took a pattern and cookie cuttered it. However, this is ancedotal and only of vague value. Their energy efficiency sux0r, btw. Much worse than ours. That can't be helping. Their carbon efficiency...youch.
Posted by: Will Baird | February 12, 2009 at 12:13 AM
Why did exports and imports from 1990 to 2000 have a sharp, distinct upward tick at the end of every calendar year (I'm assuming that those are calendar years on the chart, but I'm not sure). Is this a function of the way the statistics happen to be reported, or to Chinese enterprises tend to buy and sell big-ticket things at the end of the year, to run through the remainder of their budgets?
Posted by: Dennis Brennan | February 12, 2009 at 10:07 AM
U.S. imports and exports are looking the same way. Both plummeting, imports faster than exports.
It's weird, though. If I had more time at the moment, I'd poke around the bilateral data. Are neighboring countries seeing the same pattern in their bilateral trade? Do FTAs have any effect? And is the Eurozone really different, or is that just another outdated anecdote?
Posted by: Noel Maurer | February 12, 2009 at 10:08 AM