Decoupling Much? Nope. •China's Exports Fall Record 26.4% as Global Demand Dries Up

[ByLoSellHi]

China's Exports Fall Record 26.4% as Global Demand Dries Up on Recession

By Bloomberg News

http://www.bloomberg.com/apps/news?pid=20601087&sid=al8v4wR00eSo

June 11 (Bloomberg) -- China’s exports fell by a record as the global recession cut demand for goods produced by the world’s third-largest economy.

Overseas sales dropped 26.4 percent in May from a year earlier, the customs bureau said in a statement on its Web site today. That compares with the median estimate for a decline of 23 percent in a Bloomberg News survey of 15 economists, and a 22.6 percent contraction in April.

“Exports may be at the bottom,” said Wang Qian, a Hong Kong-based economist at JPMorgan Chase & Co. “A sustained recovery is unlikely until demand from major economies picks up around the middle of this year.”

China, the world’s second-biggest exporter, has cut taxes, boosted lending and pledged to keep its currency stable to sustain overseas sales amid the worst global slump since the Great Depression. The economy grew at the slowest pace in almost a decade last quarter as tumbling orders forced manufacturers to shut factories and fire workers.

The decline was the biggest since Bloomberg data began in 1995.

“The worst time for exports is probably over and the improving trend will be more visible starting from June,” according to Xing Ziqiang, a Beijing-based economist at China International Capital Corp. who said a holiday may have amplified the slump in shipments in May. “The recovery will be gradual and slow.”

The government said this month that a quick rebound in trade is becoming less likely and unveiled higher export rebates on some steel products, electronics, machinery and toys, the seventh increase since August.

‘Grim’ Conditions

China still faces “grim” job conditions with registered unemployment climbing and new jobs shrinking compared with a year earlier, the State Council said last week. TCL Corp., China’s biggest maker of consumer electronics, posted a 97 percent plunge in first-quarter profit as exports of televisions and mobile phones fell.

Still, China’s export orders index advanced to 50.1 in May, marking the first expansion in 11 months, a government-backed manufacturing index showed. Japan’s exports and production rose in April from the previous month, and orders placed at U.S. factories gained for the second time in three months.

China’s imports dropped 25.2 percent last month, compared with the 22 percent decline estimated by economists and a 23 percent fall in April. The trade surplus was $13.4 billion in May, smaller than the $14.9 billion estimated by economists in the Bloomberg survey.

China was ranked the world’s biggest exporter after Germany by the World Trade Organization in 2008.

--Li Yanping. Editors: Stephanie Phang, Paul Panckhurst.

To contact Bloomberg News staff for this story: Li Yanping in Beijing at +86-10-6649-7568 or yli16@bloomberg.net
Last Updated: June 10, 2009 22:51 EDT

 

[ByLoSellHi]

This is exactly the type of situation I mentioned just Monday, when Zhivodka felt compelled to open his pie hole and tell the world 'every ting gonna' be irie, man...'

 

[risktaker]

ByLo,

I'm starting to think you're that on the youtube video bustin' that alarm clock & monitor. 'Shure got dat twang!

Quote from ByLoSellHi:

This is exactly the type of situation I mentioned just Monday, when Zhivodka felt compelled to open his pie hole and tell the world 'every ting gonna' be irie, man...'

 

[ByLoSellHi]

Quote from risktaker:

ByLo,

I'm starting to think you're that on the youtube video bustin' that alarm clock & monitor. 'Shure got dat twang!

I'm a Yankee through and through.

I'm just givin' Zhivodka some shit.

On a serious note, the fact that China's exports have dropped this steeply has to be raising alarm bells. It's clear that American Consumers have dramatically pared discretionary purchases (I'd bet electronics will take a big hit in this month and last month's data) and that Chinese Officials are scrambling to avert a crisis of confidence amongst manufacturers.

When the people don't have jobs, strife is in the air.

And I'm not a protectionist, nor am I one who thinks that our 'free trade' policies have been entirely sensible over the past two decades.

There's a balance to be struck in taking advantage of competitive advantages, and hence, greater efficiencies that robust trade with foreign countries allows us, and our national security and long-term structural issues.

 

[random flyer]

so similar to the usa in 1930s they are sitting on a mountain of inventory,the western consumer is tapped out so it will take some time to clear and the chinese consumer coming to the rescue is bit of a myth i was reading an article recently which was talking about how real disposable income of yr average worker has gone backwards in the past 10yrs (pay 62% taxes)a nd it has been the govt and large corp that have sucked up the bulk of these massive inflows...interestingly they have been on a buying binge in commodities during the last few months....anyway still think s&p will close dn for the yr but would rather short fxi and xly into their highs just my few yuan worth

 

[ByLoSellHi]

http://news.bbc.co.uk/2/hi/business/8094423.stm

This is my pair trade, along with Chinese Exports falling at a record clip.

It's pretty incredible to read that Japan's economy has essentially shrunk more than ever before.


Japan GDP Shrinks At Record Pace

by Roland Buerk
BBC News, Toyko

Japanese shoppers are spending less

Japan's economy shrank less than previously thought in the first three months of the year, but still contracted at a record pace.

Gross domestic product - the sum of the nation's goods and services - shrank by 3.8%, equivalent to 14.2% over a year.

Earlier it was estimated at 4%, but there have been brighter signs in recent weeks.

Japan has been hit hard by the global downturn because it relied on consumers abroad to buy its cars and electronics.

People in Japan are starting to hope that the worst might be over.

The Government now says in the first three months of the year the economy shrank by 3.8%, less than was earlier estimated but still the worst on record.

The reason for the revision is that capital expenditure - spending on factories and equipment - was cut by less than had been previously thought.

Modest growth?

In this quarter the world's second largest economy is forecast to grow modestly.

Firms are benefiting from increasing demand from China where the Government is spending nearly $600bn (£365.5bn), some of it on infrastructure.

And massive stimulus measures by Japan's Government, including cash handouts, are starting to have an effect.

But Japan's exports are still around a third lower than a year ago and factories are being run far below full capacity.

If companies continue to cut jobs and investments it could cause a fragile recovery to stall.