Wednesday, February 10, 2010
We all know that China is a prolific exporter of cheap, quality goods to the rest of the world. Given the recent recovery in the U.S. and other developed countries, I was not surprised to read last night that China's January '10 exports rose 21% from what they were in Jan. '09. But what really surprised me was to see that China's Jan. '10 imports had soared by 85% from a year ago. This may be distorted a little on the high side by the timing of the Chinese New Year, but there is no denying, as this chart shows (not seasonally adjusted), that the Chinese have been doing their best to spend as much of their export earnings as possible. In fact, China's trade surplus (the thing that they are accused of aggravating by keeping the yuan "artificially low" against the dollar) was lower last year than it was in 2007 and 2008.
Skeptics will argue that Chinese imports surged because they are mindlessly stockpiling all sorts of commodities, but I see this as a sign that one of the world's most dynamic economies has recovered rapidly from the same trade collapse shock that rocked the rest of the world. It's onward and upward from here.
Posted by Scott Grannis at 9:41 AM