Every time we think we are in the clear, China comes along and rains on our parade.
On Wednesday, China announced that official exports declined by 3.1% in June, to $174bn. It’s the first decline since Jan. 2012, and was far below analysts’ expectations of 4%.
Chinese officials began a series of tightening around issuing fake invoicing by exporters to boost figures. But even then, the results need to be taken with a huge grain (no, make that a fistful) of salt.
June trade figures raises the specter that China wouldn’t meet its GDP growth of 7.5% in its next announcement.
Chinese economic figures on the decline? STOP THE PRESSES! The really disappointing news out of this is that I’m surprised the market hasn’t already priced in the fact that the Chinese economic growth is a house of cards ready to collapse at any minute (if it hasn’t already). “Official” GDP and trade figures are artificially boosted to attract inflows of foreign capital (from Western and Chinese ex-pat origins), and are basically lipstick on a pig.
And this comes after last month’s interbank rate squeeze. The picture doesn’t look good.