China’s Economy

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

The United States needs to reduce its trade deficit, but arithmetic being what it is, that can happen only if other countries reduce their trades surpluses.  That means Germany and Japan, but most of all it means China — and as the chart on the right shows, China’s exports are indeed down.  Good news?  Not really: as Brad Setser has pointed out in the past, this only produces a declining trade surplus if imports also go up — or at least decline at a slower rate than exports.  Ed Hugh delivers the bad news:

The decline [in exports] was the biggest since Bloomberg data began in 1995. And more to the point as far as Brad is concerned China’s imports dropped 25.2 percent last month, compared with a 23 percent fall in April. Hence China just one more time ran an increased trade surplus (up to $13.4bn in May from $13.1bn in April), and it is no clearer to me than it is to Brad how a country running a trade surplus can be leading a surge in global demand. Indeed this months data, far from prodiving evidence of an accelerating “recovery” continues to point towards ongoing weakness in global demand, just like the evidence we are receiving from Germany and Japan.

Ed has more at the link, including some detail about China’s imports that provides even more cause for gloom, but the bottom line is that there’s not much hope in the short term that China will be leading a global recovery.  Their economy isn’t rebalancing, it’s just falling.  No green shoots here.

Dear Reader,

This feels like the most important fundraising drive since I've been CEO of Mother Jones, with staggeringly high stakes and so much uncertainty. In "News Is Just Like Waste Management," I try to unpack the reality we all face and how we can rise to the challenge. If you're able to, this is a critical moment to support Mother Jones’ nonprofit journalism: We need to raise $400,000 to help cover the vital reporting projects we have planned, and right now is no time to pull back.

Monika Bauerlein, CEO, Mother Jones

Dear Reader,

This feels like the most important fundraising drive since I've been CEO of Mother Jones, with staggeringly high stakes and so much uncertainty. In "News Is Just Like Waste Management," I try to unpack the reality we all face and how we can rise to the challenge. If you're able to, this is a critical moment to support Mother Jones’ nonprofit journalism: We need to raise $400,000 to help cover the vital reporting projects we have planned, and right now is no time to pull back.

Monika Bauerlein, CEO, Mother Jones

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate