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Great Leap Backwards
Different month, same contrast.
The much-discussed divergence between China's outbound shipments and imports was on full display in trade data released Tuesday. Exports grew 8.7% in August, the Party said. That was the briskest YoY pace in 17 months.
The value of those shipments was about $310 billion, the most in nearly two years, and not too far off the all-time high set towards the end of 2021. The figures easily topped estimates.
By contrast, imports barely grew at all, posting a decidedl
“ To reiterate: An autocracy that loses its claim on legitimacy with the people quickly — and necessarily — becomes a dictatorship. Oppression turns to outright tyranny.”
Something to consider before half of my fellow Americans decide that a tax cut or tacit social approval of their worst behaviors, is worth ending our 200+ year democratic experience.
There are plenty of modern appliances/conveniences (stoves, flooring, washing machines, A/C, wifi, computers, etc,) that I am sure many rural Chinese people (35% of the Chinese population) would want to upgrade to, if provided adequate electricity and given the money to purchase such appliances/conveniences.
About ten years ago, one of my kids spent several months traveling in China, and at one point stayed with a family that ran a farm. That home had a dirt floor, no wifi and a barely functioning stove top, no AC. My child was able to stay in touch with me by bartering with the (wealthier) farm family next door by exchanging Mars bars for wifi usage. 🙂
If the Chinese people ever get fed up and say “no” to authoritarian dictatorships, which would clear a pathway for China to become a better/fairer global power with human rights, property rights and rule of law; the USA (including the US work force and the USD) would finally have some serious competition to the top position in global leadership.
Another marginal self-inflicted wound to domestic spending (emphasis on marginal) is the torpedoing of Ant Financial. Ant specialized in collateral-free microloans. They could operate in size because they maintained seriously low reserves (I recall reading the number 3%) against those loans. Jack Ma’s famous last words (last words as a “free” man who seemed to actually be above the law, Elon style) were to criticize banking regulators for their “Pawn shop mentality.” He meant, of course, the requirement that loans be backed by collateral. Then the regulators came down on him and Ant with both feet. Now, Ant is much more like a bank. They keep bank-level reserves, and they’re much stingier with loan issuance. I’m quite sure that has had an impact on domestic demand at the margins.