…and there are lots of really good ones. Expect to hear lots of “unexpectedly” on the radio and TV news reports tomorrow explaining that China’s economy just stopped.
…okay it’s not an “all stop” exactly, but what caught my eye is a -41% change in crude oil imports to China. Also troubling is the -50% drop in iron imports and -62% in coal. You keep those numbers up for long, pretty soon people start saying “hey, whatever happened to that one country that used to make half of all manufactured goods in the world?”. The iron and oil are turned into stuff, and the coal is what they use to fire the power plants to make the stuff. People are buying less stuff from China all over the world (except for the USA), and selling stuff to people all over the world is basically the only thing China does for real GDP growth*
I’m joining with Mish on taking the “under” on the future GDP estimates for China’s economy. And when that set of less-by-half numbers hits Australia (which depends on Chinese imports of coal and iron ore) you must remember to put “unexpectedly” in the articles about Australia’s economy collapsing fairly quickly, combined with their housing bubble bursting. China also takes these commodities from Europe, which is also already suffering economically. The world’s economy, then, is poised for a collapse in 2015 or early 2016 . . . unexpectedly, or right on schedule, depending on which economists you listen to. No, China isn’t a trigger. It’s part of the same collapse from the USA’s 2007-2009 housing bubble bursting. The whole house of cards is going to come down some more, possibly even harder. NONE of the systemic problems afflicting the world’s economic systems have been fixed, but a lot more money has been blown into bubbles in the last 7 years.
I think what we are seeing here is the dead cat bounce finally coming in for its second landing.
*government-mandated spending on cities that stand unoccupied, paid for with loans in their own currency, actually are a net negative – but they are reported as +GDP numbers so it looks like the country is doing well. It’s not, and hasn’t been for a while.