Global Demand for Chinese Goods Sinks, Chinese Leaders ‘Caught Off Guard by Sharpness of Downturn’

Saturday, May 9, 2015
By Paul Martin

by Wolf Richter
WolfStreet.com
May 8, 2015

When the Reserve Bank of Australia cut its cash rate target to a record low of 2.0% this week, it specifically blamed the slowdown in China. It is the key market for Australia’s most important exports, such as iron ore, whose price has plunged due to slowing demand in China, dragged down by a number of factors, including weak exports of manufactured goods to slowing economies around the globe.

Trade moves in wobbly circles.

So today, China’s General Administration of Customs announced that imports had plunged 16.2% in April from a year ago, after they’d already plunged 12.7% in March (hence the fretting by the Reserve Bank of Australia). And exports dropped 6.4% from a year ago, after they’d plummeted 14.6% in March.

Analysts, who apparently never look at the collapsing shipping rates from China to certain parts of the world, had inexplicably expected exports to rise 2.4%. So the drop was “unexpected.”

The morose economic climate was unexpected apparently even at the very top in China: Reuters was told by “policy insiders” that China’s leaders were “caught off guard by the sharpness of the downturn.”

That hasn’t kept the Chinese stock market from soaring 75% over the past six months, despite the 5% swoon this week, the worst weekly loss in five years.

The Rest…HERE

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