Looks like the sun has gone behind the clouds in China for a bit! Not only are the solar panels creating friction between China and the EU, but now it turns out that last month saw Chinese export growth unexpectedly decrease. Imports into China were also in for a decrease as the dropped last month (by 0.3%) to a record low and you’d have to go back to the start of 2012 to get better figures. Although, some might argue that what with the faked trade-surplus figures revealed last month, it’s hardly surprising that figures actually fell last month.
Beijing released figures today that showed that there was a rise of 1% in overseas sales compared with May 2012 (General Administration of Customs). April had shown an increase of a staggering 14.7%. The figures for May are well below any analysts’ forecasts and it’s perhaps revealing that China is trying to get its house in order in the wake of criticism that they had faked their trade surplus. There is always a silver lining in a cloud some might say. The figure for May seems a little more realistic (and easier to swallow for the rest of the world’s economies). For once, we are seeing a true figure regarding Chinese exports. That picture shows the outlook as being pretty depressed. One man’s meat is another man’s poison? I think we can all take a strong Chinese export figure, but only if it is realistic and a true representation. Otherwise, we can lie too, can’t we? Can’t we just!
But, a depressed figure in exports from China might show signs that economic recovery is not as sustainable around the world as the Federal Reserve might like us all to think. Similarly, in the EU it’s not because they use positive-speech tactics and tell the Japanese that the crisis and the recession is over in the EU to boost morale and confidence that it is actually going to happen. Present François Hollande of France gave a speech while on a state visit to Japan that the “Euro crisis is over” today. Of course it is! Didn’t everybody already know that, with unemployment rising and the wonderful growth prospects that are being experienced in the EU27. Such revelations are nothing more than irresponsible and can certainly be likened to dissimulation. Perhaps, Mr. Hollande has been taking a leaf out of the little red book of how to fake figures that Mr. Xi Jinping seems to keep in his pocket.
At least, it will be hard to criticize the Chinese over fake figures, when we are lying through our teeth at the same time. Despite some good gains in the US regarding employment and consumer confidence, the figures in China can only be telling of a fall in world economic growth.
Both exports and imports between China and the USA have taken a toll. Chinese exports to the USA dropped by 1.6% in May in comparison with May 2012. US exports to China also dropped by roughly the same amount (1.5%) over the same year period.
The European Central Bank announced only a few days ago that the Eurozone was going to contract by 0.6% in 2013. That was a worsening of the previous forecast of 0.5%.
The Yuan is also strengthening and it has increased by as much as 1.6% in comparison to the US Dollar in the past year. That’s nothing in comparison with the 14%-hike against the Yen. Chinese exports look set to remain weak while the Yuan is so strong.
Now, the growing furore between China and the EU over duties on solar panels and now EU wines is likely to have a further effect on Chinese export figures. Looks like the sun has gone behind the clouds for the moment.
Whatever happens, next week looks like being a pretty rough ride on the international markets and you had better hold on to your pants unless you like roller-coastering it, that is!
Originally posted Chinese Exports Fall and Strong Yuan Bad Times Ahead
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