China's weakening trade figures should concern us all

Economy 13:15 15.01.2019

If China wanted to appease Donald Trump's ever-present anger at its trade surplus with the United States, the latest trade figures won't work to calm him down.

China's exports to the rest of the world, announced on Monday, were unexpectedly down when they had been expected to rise.

But that was more than offset by the even bigger drop in China's imports.

Analysts had been expecting a 5% rise in China's imports from the rest of the world. Instead, they got a 7.6% fall.

The difference between the amount China sells and the amount it buys - the trade surplus that so excites the US president's wrath - grew bigger.

In fact, the more the US president fulminates about China selling the US far more than it buys, the more it seems to go against him.

By the end of last year, China exported $324bn more in goods and services to the US than it imported. That's a record surplus, more than a quarter bigger than it was before Mr. Trump came to power.

The focus of Mr. Trump's ire has primarily been that China is selling the US more than it should, while using unfair means to limit US imports. Thus the tit-for-tat trade war, periodically interrupted by talks.

But the figures highlight a deeper concern on the other side of the trade balance: that Chinese consumers simply aren't buying enough from anyone, home or abroad.

Prices are barely rising. At the factory gate, they were up only 0.9% at the last count - slower than expected. The evidence is mounting that China's economy is slowing faster than either its rulers or the rest of the world anticipated.

That concern knocked the markets on Monday, just as it did when Apple announced a slowdown in demand last year or when Jaguar Land Rover (JLR) cut jobs last week, partly prompted by China's slowdown.

China's generally competent officials are aware of the problem and have already taken some modest measures to counter it by stimulating demand.

Last week, for example, the People's Bank of China eased the capital requirements that decide how much its banks have to set aside for every loan they make.

That, in theory, would release $117bn (£91bn) tied up in banks to be lent into the economy - but only if there is demand from borrowers such as businesses to borrow. And that in turn depends on enterprises being convinced they can make money by doing so.

Further stimulus measures are expected in the next few weeks. Will it work?

Since the financial crash of 2008, China's leadership has sought to keep up its pace of economic growth through a massive expansion of lending.

Debt as a proportion of the economy has soared, from 140% of GDP in 2007 to nearly 260% now.

Infrastructure spending has mushroomed, with thousands of miles of new railways and dozens of new underground systems and airports constructed.

China's economy is used to a hefty and regular dose of stimulus.

The hope must be that it isn't yet numb to it.

Hikmat Hajiyev: "Azerbaijan is a natural link connecting Central Asia and Europe" - VIDEO

News line

Greece's GDP shows highest growth among EU countries
Greece's GDP shows highest growth among EU countries
19:00 29.03.2024
Hezbollah fires at Israel with Iranian-made missiles
Hezbollah fires at Israel with Iranian-made missiles
18:19 29.03.2024
Azerbaijan's Dushbara is on list of tastiest dumplings worldwide
18:00 29.03.2024
EU-Armenia-US joint conference may encourage Armenia to new provocations - Azerbaijan's FM
17:47 29.03.2024
Melting Polar Ice Caps Slow Earth's Rotation, Delaying "Leap Second" Addition
Melting Polar Ice Caps Slow Earth's Rotation, Delaying "Leap Second" Addition
17:29 29.03.2024
EU Delegation to Armenia Signals Push for Stability in South Caucasus - Insights from Arnold Stepanyan
17:14 29.03.2024
Russian MFA calls 102nd Military Base only guarantee of Armenia's sovereignty
17:01 29.03.2024
"The Ukrainian army is addicted to gambling" - says Ukrainian MP
"The Ukrainian army is addicted to gambling" - says Ukrainian MP
16:50 29.03.2024
Why are the US and the EU arming Armenia? - Pundit talks on Ednews
16:39 29.03.2024
Erdogan to visit US on May 9
Erdogan to visit US on May 9
16:26 29.03.2024
Hulusi Akar, US congressmen mull Azerbaijan-Armenia peace process
15:52 29.03.2024
Russian ambassador sees no reasons to expect Russian-US ties to improve
15:36 29.03.2024
British army lifts ban on serving soldiers having beards
British army lifts ban on serving soldiers having beards
15:29 29.03.2024
Hikmat Hajiyev: "Azerbaijan is a natural link connecting Central Asia and Europe" - VIDEO
15:13 29.03.2024
Azerbaijan weather forecast for March 30
Azerbaijan weather forecast for March 30
15:00 29.03.2024
Tajikistan detains 9 people over Russian concert shooting
Tajikistan detains 9 people over Russian concert shooting
14:46 29.03.2024
Washington Is Forming A New Alliance - OPINION
14:32 29.03.2024
Individuals identified as drug users will not be admitted for service in Azerbaijani tax authorities
14:14 29.03.2024
Philippines' Catholic devotees nailed to crosses to re-enact crucifixion
Philippines' Catholic devotees nailed to crosses to re-enact crucifixion
14:00 29.03.2024
Umud Mirzayev: EU's South Caucasus Visit Aims to Maintain Regional Influence
13:45 29.03.2024
Public Television of Armenia Reveals Villages to be Returned to Azerbaijan
13:39 29.03.2024
Death toll of Israeli strike in Syria rises to 42, war monitor says - UPDATED
13:25 29.03.2024
Azerbaijan toughens penalties for non-compliance with rules of state of emergency regime
Azerbaijan toughens penalties for non-compliance with rules of state of emergency regime
13:12 29.03.2024
How will the EU's visit to the South Caucasus affect the peace process? - Former ambassador talks to Ednews
13:00 29.03.2024
Azerbaijan tightens sanctions for breaching special operation zone rules on religious extremism
12:45 29.03.2024
Azerbaijan toughens penalties for non-compliance with rules of social emergency environment regime
12:33 29.03.2024
About $7 bln of foreign direct investment was invested in Azerbaijan last year
12:00 29.03.2024
Number of people injured in Crocus City Hall terrorist attack reaches 382
11:48 29.03.2024
Media: Netanyahu rejected the Mossad Chief's proposal for a possible agreement in Gaza
11:37 29.03.2024
Azerbaijani Parliament's meeting kicks off
11:26 29.03.2024
An American couple founded a website, which identifies brands that support Israel
An American couple founded a website, which identifies brands that support Israel
11:07 29.03.2024
US scientists name infection more dangerous for brain than coronavirus
US scientists name infection more dangerous for brain than coronavirus
11:00 29.03.2024
Parviz Shahbazov: Foundations of 4 new renewable energy plants will be laid this year
Parviz Shahbazov: Foundations of 4 new renewable energy plants will be laid this year
10:50 29.03.2024
Japan eyes self-driving expressway lane network
10:40 29.03.2024
Oil prices end 1Q24 with strong growth
10:30 29.03.2024
SECRETS of the European Union's visit to the South Caucasus - Fikret Sadigov EXPLAINS
10:25 29.03.2024
Ammunition found in Khankandi
Ammunition found in Khankandi
10:10 29.03.2024
Iran’s top diplomat: Military presence of third countries in Caspian Sea goes against interests of region
Iran’s top diplomat: Military presence of third countries in Caspian Sea goes against interests of region
10:00 29.03.2024
Armenia officially announces freezing its participation in CSTO
09:50 29.03.2024
US hopes to return to purchase of 72 fighter jets per year amid budget cuts
09:38 29.03.2024
Hamısı