We still have a hard time contemplating how China’s economy can be growing at all at this point. Today it’s official that its export sector — which is basically the only game in town — contracted in the last month:
The November trade surplus widened to a new monthly record of $40.1 billion as exports fell 2.2 per cent from the year-earlier period and imports fell even faster, dropping 17.9 per cent, the customs agency reported. Those declines are especially painful for China, where exports rose until recently at annual rates above 20 per cent. Even in October, exports still grew by 19.1 per cent as global conditions deteriorated.
The sharper-than-expected decline adds to pressure on Beijing, which has launched a massive stimulus package to boost consumer spending in hopes of insulating China from the global slowdown.
Like the US, China is set to embark on a major infrastructure project to keep the economy going. Unlike us, they actually have the money to afford it.