As a follow-up to China Exports, Imports Soar: Global Trade Outlook Improving? let’s investigate China’s “Import Surge” with a series of pictures.
China Imports and Exports Year-Over-Year
The above from ZeroHedge China Trade Data Beats As Crude Demand Surges (Ahead Of Maintenance)
Crude Monthly Year-Over-Year Price Rise Percent
Crude Monthly Year-Over-Year Dollar Increase
US Trade in Goods and Services
US Trade in Goods and Services Moving Average
US Trade Deficit by Country Through April
US Trade with China 2017 vs 2016
The idea that global trade is improving is largely a commodity-induced fantasy related primarily to the price of oil.
Related Articles
- China Exports, Imports Soar: Global Trade Outlook Improving?
- Trade Deficit Widens: Cascade of Bad News Accelerates, Trump Will Howl
Mike “Mish” Shedlock
Dollar denominated metrics have become meaningless due to printing removing accurate supply/demand data from price. Only honest money provides accurate information.
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Seems like the global trade of buying and selling Gold has greatly increased…
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Zion National Park – Autumn – Lower Emerald Pools Part 2 (After a Rainfall)
https://mishmoments.com/2017/06/08/zion-national-park-autumn-lower-emerald-pools-part-2-after-a-rainfall/
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I am curious what the components of the trade deficit look like.
Historically (and its probably still true), China runs a big deficit importing raw materials from Australia, Brazil, OPEC countries, Russia, etc. Really low profit margin commodities. Then China runs a really big export surplus with Europe and especially the USA — in value added products… and China “keeps” (profits from) the value added.
I think I know the answer to this question… but what are the details of the US trade deficit? How much are we importing low value added oil / nat gas (from Mexico & canada) and how much are we exporting higher value added products? Boeing jet liners should not count, because the price distortions (military and the ExIm bank subsidies). What stuff are we exporting without subsidies and price distortions?
Instead of obsessing over the total trade deficit number, we need to look at the components. Not sure we (the USA) are going to like the answer, but we need to focus on **WHAT** stuff we export, not just the dollar amounts.
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I think our top 3 exports are: jobs, dollars and waste paper.
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Yes, you are saying what I have said a few times. To understand the deficit you would have to line item detail it. Even more complicated than what you are trying to determine as import and export is not the total tally, what is held here also increases domestic book value assets and that should not be ignored. Would be one tough thing to really figure out. Therefore I never comment on deficit stuff. Simple replies to a very complicated subject.
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And let’s not forget that a lot of goods exported are sold from the company’s domestic legal entity to their BV or other international entity before being sold to the final customer at the true price. Those export numbers are artificially deflated to move the income and profit offshore.
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Yes … and those import numbers are probably just as bogus (inflated invoices as means of capital flight) … and some of that capital flight has landed in real estate in Australia / US / Canada.
The other question is the large scale build up in debt ($1 trillion Q1 alone) and its impact on exports / imports. Borrow to stock up on commodities (even in face of weak demand)? Debt for vendor financing to boost exports?
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If you are a Chinese manufacturer, and you know you are going to need “x” tons of copper sometime in the next year or so — next quarter or next year, depending on economic activity, but you will need it sometime…
You can store your purchasing power in USD, which is managed by a clueless academic who refuses to accept that her (and Bernanke’s) policies simply do not work. You can store your purchasing power in a currency that has lost 95 percent of its value since the Fed started helping. You can store your purchasing power in bonds of a foreign power that refuses to live within its means (and therefore will default, its just a question of when and how)…
OR…
You can buy “x” tons of copper and store your wealth that way. Heads, you get a cheap price for the copper, and the academics at the Federal Reserve can’t steal 5-10% of your wealth while you wait. Tails, somebody else gets stuck with your debt if you can’t pay but the copper will still be worth something.
Unless you have a PhD from Princeton or MIT … this is really a no brainer decision. No one with a brain cell believes Janet Yellen knows what she is doing, and the rest of the FOMC isn’t looking too sharp either.
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One reason I’m still bullish on King Dollar.
Those Chinese manufacturers buying commodities? State owned.
Those Chinese banks lending them the $$s? State owned.
Debt growth in China hitting supernova status … when the bad debt hits critical mass … there will be a massive print job to paper over.
Anyone thinking yuan will have reserve status (anytime soon) has rocks in their head.
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It is amazing how you can condemn China as a reserve currency because they have too much debt…
… and in the same breath claim the US doesn’t have the same problem
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Remove oil, coal and natural gas from the import export models and we can clearly see where trade is happening. Energy products and food should have separate graphs since they are necessities.
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