September 9, 2019

UNEXPECTEDLY? China’s exports fall unexpectedly in August, as trade war continues to slam industrial economy.

Furthermore, the much-reported 3.8 per cent depreciation of the yuan in August failed to stop the decline in exports – despite Washington’s fears that it was being used to give China’s exporters an unfair advantage.

It is a far cry from the double-digit expansion that characterised the export machine that powered the Chinese economy for more than two decades.

The weak export figures will put further pressure on China’s already slowing economy. The central bank on Friday said it would cut the amount of cash banks must hold as reserves to the lowest level since 2007 in a bid to inject liquidity into the economy and stimulate demand.

And that’s with American businesses front-loading their orders from China in the weeks before the new tariffs kicked in.

I’d also add that the consumer-driven economy China needs to develop to replace slowing export growth requires a kind of consumer-driven country which Communists have a hard time delivering — and over the long run, an impossible time accommodating.

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