Good piece by @greg_ip, summarizing the work of Klein and Pettis ...
Glad China's low level of household consumption is drawing attention again. It is still well below its pre-WTO accession level.
wsj.com/articles/as-ch…
Glad China's low level of household consumption is drawing attention again. It is still well below its pre-WTO accession level.
wsj.com/articles/as-ch…
As Ip notes, China's surplus in manufacturing remains quite large relative to the economies of its trading partners ("surpluses, especially for manufactured goods, remain enormous). When commodity prices fall, that quickly shows up --
Right now, for example, China's goods surplus is soaring even as global trade volumes contract ...
I usually try to smooth the monthly data, but China's May surplus was enormous and June may not be much smaller.
I usually try to smooth the monthly data, but China's May surplus was enormous and June may not be much smaller.
Need the q2 data to prove this -- but my strong suspicion is that the fall in oil prices (and less Chinese tourism spending) has led the global current account surplus to shift back to Asia in a big way. But just a hunch for now.
