Comments on: More terrible trade numbers from China

By: A. West

A. West — Tue, 17 Feb 2009 23:04:35 +0000

Any foreigner who criticizes Chinese policies and/or Chinese leaders are “Anti-China”. It’s a favorite package deal developed by the CCP.

By: Dr.Frank Loo

Dr.Frank Loo — Tue, 17 Feb 2009 13:46:11 +0000

The Baltic Dry Index has started to pull back since February 11. This is not a good sign.

By: PB

PB — Tue, 17 Feb 2009 01:54:23 +0000

Greg – I appreciate your comments and insights as it is important to have balance in these discussions. I also agree that Michael’s comments tend to be more critical and less balanced then one might expect, but they are interesting and insightful and therefore, helpful, in developing a more informed understanding of the issues

By: PB

PB — Mon, 16 Feb 2009 18:10:05 +0000

It would be interesting to know the overall mix of price and volume in the significant decline of January imports. For example, the prices of iron ore and crude oil declined 45% and 58% respectively, while volume was relatively, only down 11% and 8%. While still a major drop in volume, the decline should not be a surprise given the lack of demand globally but also probably means that domestic demand is down as well but not as much as indicated by the overall drop in imports. It still seems reasonable to expect the trade deficit to narrow significantly as the government stimulus takes effect well before any possible recovery in exports. Nouriel Roubini recently referred to the economic stimulus in China as the “gold standard” — let’s hope he is right.

By: Dr.Frank Loo

Dr.Frank Loo — Mon, 16 Feb 2009 16:58:22 +0000

Michael & Twofish: The heat of the China stock markets is getting hotter each day and I am rather scary about it. It is reported by Cable TV in Hong Kong today (February 16) investors are surrendering their life insurance policies to cash into the markets. This is horrendous and policymakers have to do something to stop this stupidity. Buying a life insurance policy is different from buy the stock of a particular company. I don’t want to go into details here.

I am still maintaining what I have said previously i.e. “Beware The Ides of March”.

By: Twofish

Twofish — Mon, 16 Feb 2009 08:55:08 +0000

FYI, although I very, very strongly disagree with Michael Pettis and Brad Setser on their views of global imbalance, I’m very careful not to try to label their views as “anti-China” or mine as “pro-China” since the purpose of this discussion is to figure out what the optimal economic policy for China is.

Personally, I think that policies based on the notion of global balance and overcapacity would be quite disastrous for China, but by labelling the policy “anti-China” is a bad thing thing it would 1) turn the discussion into one of motives and 2) assume the conclusion. It may well be that the policies that I advocate are bad ones, in which case I’d be the one that is “anti-China.”

One of the good things about Chinese economics is that when it comes it the important issues there is not very much of an “official position.”

By: PB

PB — Mon, 16 Feb 2009 07:55:19 +0000

XuX – the Chinese leaders have not said they intend to pursue policies that would slow growth in other countries and have reccognised for some time the need to build a more balanced economy but clearly that is not something that can be done overnight. Additionally, if you really believe that people in China accept leaders comments uncritically, then you are missing a wonderful opportunity to learn from the wide range of opinions expressed and the vigourous debates that occur about the economy, business and reform. The rate of change over the past 10 years has been quite remarkable in many areas while clearly recognizing that there are also many reforms still needed.

By: PB

PB — Mon, 16 Feb 2009 07:42:44 +0000

Greg – I appreciate your comments and insights as it is important to have balance in these discussions. I agree that Michael’s comments tend to be more critical then balanced then one might expect, but they are interesting and insightful and therefore, helpful, in developing a more informed understanding to the issues

By: XuX

XuX — Mon, 16 Feb 2009 05:29:19 +0000

Greg: As Chinese leaders repeatedly said, the biggest contribution that China can make to the world economy is to maintain fast and steady growth of its own economy.

Well if that’s what they said, it must be true of course. Chinese leaders would never dream of saying anything that isn’t true.

But what if policies to encourage Chinese growth cause slower growth in other countries, for example by increasing the trade surplus? Should the rest of the world appreciate the Chinese leadership as uncritically as the Chinese people must?

By: TMC

TMC — Mon, 16 Feb 2009 05:24:31 +0000

Greg, did you actually read anything Professor Pettis said before responding? It would have helped. For example you say: Your proposal that the “rest of the world” give China one year’s time to correct the “imbalance” is just – I don’t know what to say.

What? my reading (and re-reading) is that he said almost the exact opposite. China cannot possibly adjust in one year and so the rest of the world must work with China over several years to achieve a balance.

This is probably what he meant when he said that anyone who disagrees with the official position is automatically labeled anti-China. Pathetic.