Chinese Exports Plunge Again, Dreadful Weakness Cited in Both U.S. and European Markets

There’s no way to spin these numbers, other than conceding to the uncomfortable truth that the global economy is in serious trouble of heading into a very serious recession. In spite of China manipulating its currency lower by 9% over the past year, exports are still plunging — down by a staggering 7.3% for October alone.

The yuan has been on a non-stop run lower, hitting 6 year lows v the dollar.

Analysts now believe China is permitting its currency to accelerate to the downside, in order to stave off a quickening in the reduction of currency reserves. The fact that onerous restrictions are applied to the citizens of China, with regards to the amount of money permitted to leave the country, coupled with the fact that the pressures in the yuan and SHIBOR still persist, one has to surmise that something is dreadfully wrong with the current state of the Chinese economy.

Looking at the numbers, one can easily see that China’s 6.5% GDP goals are only being met by reckless lending and government financed infrastructure projects. Both pressures on wages and a weak N. American and European marketplace have left the great dog eating nation of China with nowhere to send their wares. In spite of all that, they still clock in a $49b trade surplus, indicative of a country taking advantage of consumer based economies — the equivalent of transferring wealth from the indebted west to the newly rich east.

Overseas shipments dropped 7.3 percent from a year earlier in October in dollar terms
Imports slipped 1.4 percent
Trade surplus widened to $49.1 billion

A depreciation of about 9 percent in the yuan since August 2015 has cushioned the blow from tepid global demand, but failed to give shipments a sustained boost. Rising input costs and surging wages have flattened exporter profit margins to the point where many can no longer discount and may raise prices, according to interviews at the Canton Fair last month. With global demand tepid, policy makers are relying on infrastructure investment and a property led pick up in local demand to reach their expansion goal of at least 6.5 percent this year.

“External demand remains sluggish across the board,” said Julia Wang, an economist at HSBC Holdings Plc in Hong Kong. “On the import side, commodities demand is still holding up well, suggesting that domestic infrastructure investment likely remains strong.” “Trade’s contribution to China’s economy is now diminishing as the economy increasingly depends on domestic demand,” said Zhu Qibing, chief macro economy analyst at BOCI International (China) Ltd. in Beijing.

“External demand hasn’t rebounded, so trade figures are weak,” said Iris Pang, senior economist for Greater China at Natixis SA in Hong Kong. “The upcoming U.S. election is also posing uncertainty to China. If Trump wins, trade will be severely affected, not only for China, but also globally.”

The Details
Exports to U.S. slipped 5.6 percent in October and fell 8.7 percent to EU.
Imports from U.S. fell 6.9 percent
Exports slipped less when measured in yuan as depreciation cushioned impact of tepid global demand
Crude imports fell from a record
Coal imports fell for a second month

What this means for stocks is the DEATH OF THE MALL trade is alive and well,  ahead of the holiday shopping season. China will continue to rig their GDP through debt fueled projects, which is entirely unsustainable. And, the U.S. will be pressured to provide succor for an otherwise rich Chinese nation — dealing with a very poor and ill treated slave factory system, utilized by a globalist cabal of blood sucking devils.

Eventually, their currency reserves collapse and the yuan with it. That will be the next panic.