Thursday, February 12, 2009

China's Deterioration Continues

Notably absent from the major headlines of today was the report from China that total exports had declined 18%, and that imports had plummeted by 43%. The reason offered for the disparity between the two declines is the fact that a majority of China's imports can be characterized as partially assembled items that eventually show up as exports 3 months down the road. Hence, the import decline is indicative of a massive decline of orders "in the pipeline" These latest numbers come in complete contradistinction to the Chinese Government's projections of at least 6% growth in GDP this year. Arguments concerning the legitimacy of "The Party's" official statistics aside, we fully expect Chinese GDP projections to be revised downwards from here. The story of spectacular Chinese growth has been a popular one indeed. In reality, the country has made significant strides over the past 20 years, and has emerged as an economic power to be reckoned with. However, any suggestion that they are somehow immune to the entrenchment of the American consumer is a suggestion dislocated from reality. Sphere: Related Content

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