Profile picture
, 5 tweets, 3 min read
China's economic data ... could be better.

There isn't agreement right now on the basic direction of China's economy.

To me, the data on manufacturing trade (new data point for headline trade should be out soon) suggests ongoing weakness.

(1/x)
You can read a new paper (h/t @gavyndavies) from researchers at the San Francisco Fed in two ways. Their real import number suggests a deep slump. Their broader activity indicator suggests a slowdown to trend ...

frbsf.org/economic-resea…
@gavyndavies Fulcrum's nowcast also suggests China's 19 stimulus has been effective at restoring growth (after a steep dip in late 18)

ft.com/content/82a0a6…
@gavyndavies China is now too important to the global economy to remain a data black hole. There shouldn't be this much uncertainty ...

4/x
@gavyndavies On one point though I have a high level of confidence. If China has indeed returned to a stable growth path this year, that growth hasn't spilled over to its trading partners.

Its manufacturing surplus has been rising on the back of falling real and nominal imports

5/5
Missing some Tweet in this thread? You can try to force a refresh.

Enjoying this thread?

Keep Current with Brad Setser

Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

More from @Brad_Setser see all

Profile picture
Brad Setser
@Brad_Setser
Should the world -- and Taiwan's own citizens -- care about the large undisclosed forward book of Taiwan's central bank?

cfr.org/blog/what-does…
This is joint work with @stwill1; a .pdf version of the blog is available at Concentrated Ambiguity.

concentratedambiguity.wordpress.com/2019/10/15/sha…
@stwill1 Factoring in the undisclosed swaps position of the Central Bank of China (Taiwan's Central Bank) would imply that Taiwan has frequently intervened by more than the U.S. Treasury's 2% of GDP threshold.
Read 10 tweets
Profile picture
Brad Setser
@Brad_Setser
China's September trade data doesn't look any better 24 hours later ...

One indicator I like is China's imports from Europe. Shouldn't be driven primarily by chip prices. The trade war on balance should be a positive (trade diversion = China should import from EU not US).
China's exports to Europe have held up so far --

Weakness is on the import side.

e.g. China's surplus with Europe is growing, because China is importing less from Europe than a year ago

(data is y/y change in 3mma)
There is no doubt that the US tariffs have had an impact -- China's exports to the US are down in a big way compared to its exports to the EU (and the US is growing faster than the EU). Gap here is important.
Read 5 tweets
Profile picture
Brad Setser
@Brad_Setser
I suspect a bit too much is being made of the fact that the latest trade truce lacks the trappings of a real trade deal. The deal seems pretty minimal & shouldn't be that hard to "paper" up over the next few weeks.

(1/x)
While Trump is Trump, it would be a surprise if he doesn't want the optics of a signing ceremony in Chile ... so I would be surprised if the "deal" isn't formalized by then.

(with the caveat that there may be more to deal than it now appears)

(2/x)
The U.S. basically recognized that it is running short of good tariff targets, and that raising tariffs further would hurt the consumer and risk a recession. And China basically recognized that it would have trouble sustaining a boycott of U.S. ag.

(3/x)
Read 15 tweets

Related threads

Profile picture
IndoPacific_SCS_Info
@IndoPac_Info
#China could cut off vital supply of drugs to #America and even add lethal contaminants if trade war escalates, defense experts warn - "Basically we've outsourced our entire industry to China" dailymail.co.uk/news/article-7…
China dominates the global pharmaceuticals market & could monopolize it
China could 'weaponize' and hold drugs ransom
Not only that but it is feared Beijing could add lethal contaminants to supplies
US hospitals and military hospitals could shutdown within months, experts claim
China could cut off America's drugs supply and hold lives ransom if the trade war escalates, defense experts warn.

Decades ago penicillin, vitamin C, and many other medicines were made in the US. Now they are made in the Far East.
Read 12 tweets
Profile picture
IndoPacific_SCS_Info
@IndoPac_Info
#China economy: ‘worst is yet to come’ with trade war tariffs likely to escalate, Nomura economists say - High debt levels restrict Beijing’s room to manoeuvre on monetary easing, with better-than-expected first quarter growth proving ‘illusory’ scmp.com/economy/china-…
For China’s economy, already bruised from the trade war with the United States and a series of sluggish data, “the worst is yet to come” in the second half of this year, Nomura analysts have warned.
The economists, led by Lu Ting, said that the better-than-expected 6.4 per cent growth in China’s economy in the first quarter, was a blip that “proved to be illusory”.
Read 8 tweets
Profile picture
Julie Laumann
@Otpor17
#China President Xi Jinping to lead an entourage of over 1,000 Chinese officials and businessmen on an official state visit in #Russia – coinciding with the #SPIEF2019 – as the two countries cement political, economic and military ties on.wsj.com/2IpGWav
"Last year, #China became #Russia’s biggest trading partner, with bilateral trade topping $100 billion.

By comparison, U.S. trade with Russia was $27.5 billion last year, down from $31 billion in the year before."
#China's Xi praises 'best friend' Putin during #Russia visit, while Putin hails the "global partnership and strategic cooperation" between the 2 countries bbc.com/news/world-eur…
Read 3 tweets
Profile picture
IndoPacific_SCS_info
@IndoPac_Info
#China's Military Modernization Push Remains a Work in Progress - China trails the #US in terms of nuclear attack submarines, aerial refueling & a sufficient amphibious capacity, & it is unlikely to close the gap in the immediate future. worldview.stratfor.com/article/chinas…
Over the past 20 years, China has made tremendous progress in improving its military capabilities, but its modernization program will remain a work in progress in the decade to come.
China trails the US in terms of nuclear attack submarines, aerial refueling & amphibious capacity. Beijing will continue to develop its capabilities on these fronts, but based on current projections, it will not reach parity with the US by 2030.
Read 19 tweets
Profile picture
Christophe Barraud🛢
@C_Barraud
🇨🇳 #CHINA Q3 GDP Y/Y: 6.5% V 6.6%E (slowest growth since Q1 2009)
*NBS spokesman Mao Shengyong said that the international situation was bringing “downward pressure” on China.
*Link: bloom.bg/2RVX1ZA
🇫🇷 🇪🇺 🇨🇳 French tire maker Michelin warned of declining sales in Europe and #China in the second half of the year, dragging down shares of its competitors in the U.S. and Europe - Bloomberg
*Statement: bit.ly/2EujhqH
🇺🇸🇨🇳🇪🇺 In a volley of filings, the EU, #China and the U.S. this week escalated disputes over new U.S. metals tariffs, the European response to those levies, and Chinese intellectual property practices - Bloomberg
bloomberg.com/news/articles/…
Read 634 tweets
Profile picture
Trinh
@Trinhnomics
Okay, I think I figured out what is Trump's ultimate game in this escalated US-China trade tensions and I think he will get it. Will share my thoughts in a thread soon! 😎
1) What is Trump's ultimate game? RECIPROCAL TRADE & INVESTMENT. Pissed off about higher tariffs vs the US & non-tariff barriers. Regarding #China 🇨🇳, doesn't like forced tech transfers, Chinese industrial overcapacity, gov subs. But how to get this? Investment+Trade policy
2)Implemented #taxreforms that impacts 50% of global FDI stock & favors US as a destination; USD2trn of REPATRIATION of funds, lower retained earnings of foreign affiliates; higher INVESTMENT in the US b/c of expensing, re-shoring of manufacturing. Basically, good for earnings💪
Read 25 tweets

Trending hashtags

#Japan #VladimirLenin #Logic #Cuba #GoodNews #Lovely #USWarCrimes #PuertoRican #Sweden #ValentinaTereshkova #California #Apart #smartcities #CPIM #tradewar #Belgium #EU #LeftWingVapourwave #Cumhuriyet #TankCam #NationalHugDay #risk #ManOfSteel #economies #GeneralElection
Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just three indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!