Brad Setser

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More bad news from Japan

by Brad Setser
February 25, 2009

Japan’s January exports are down 46% y/y. The Wall Street Journal:

Japan’s trade deficit widened to its biggest level on record in January, as a global economic downturn sapped overseas demand for Japanese goods and caused exports to plunge 45.7%, the fastest decline ever. The data indicate that Japan’s economy, which in past recessions relied on exports to recover, won’t be supported by overseas demand and, if anything, will continue to suffer from the collapse in that demand. Analysts say there are few signs exports will pick up any time soon.

Japan’s January trade deficit came to ¥952.6 billion ($9.84 billion) in January, the Ministry of Finance said Wednesday. While the figure was better than analysts’ consensus forecast of ¥1.15 trillion deficit, it was still the biggest on record. It was also the fourth straight month Japan posted a trade deficit.

I never thought that a big fall in commodity prices would coincide with a big fall in Japan’s trade surplus. But right now Japan’s manufactured exports are falling even faster than Japan’s commodity-heavy import bill.

China’s 17.5% y/y fall in its January exports is far smaller than the falls in the exports of other major Asian trading powers. Japan is down 46%. Korea, 33%. Taiwan, 44%.

That strikes me as one of the key puzzle’s of today’s global economy. One potential explanation is that China is taking market share. One potential explanation is that the big fall in China’s exports is in the pipeline, as China is the last stop in Asia’s assembly chain. And one potential explanation is that a significant domestic downturn in China is adding to the downturn in the exports of other Asian economies.

Update: Jon Anderson of UBS argues that China’s electronics exports have collapsed in line with the exports of the rest of Asia. However, China’s low-tech exports — shoes, textiles, toys, furniture — have held up well. To put it just a bit differently, he argues that a lot of the press coverage about the fall in China’s low-end exports and the resulting fall in employment has the story wrong. China’s low-end, labor-intensive exports are doing (relatively) well compared to China’s electronics assembly business. He also argues that the fall in investment in Chinese real estate and related materials has added to the woes of other Asian exporters.

And Rachel Ziemba recommends the analysis of United Overseas Bank. Among other things, they noted that the credit/ housing/ consumption bubble in the West pulled Asian exports well above their long-term trend. I rather suspect artificially weak exchange rates also played a role, especially vis-a-vis Europe. The current export fall consequently represents a reversion to a more normal pattern of export growth. The current sharp fall in trade isn’t so much deglobalization as the end of a period of artificial globalization, an era where a lot of hidden subsidies — whether undervalued exchange rates in the East or the bankers’ put in the West — pushed both credit and import demand to levels that could not be sustained. But I am moving well beyond the actual analysis in the UOB piece — and into a set of topics that probably warrant a post of their own.


  • Posted by Max

    Another potential explanation: the Chinese government figures are lies.

  • Posted by charlie

    why is the yen still strong? The carry trade hangover must be over, no?

  • Posted by Cedric Regula

    I think it’s cars. They cost a lot.

    “Toyota Motor, the world number one, said its global output had fallen 42.6 percent in January from a year earlier, while Nissan Motor reported a 54.0 percent plunge and Honda logged a 33.5 percent drop.”

  • Posted by Cedric Regula


    The yen is starting to break down. Went from 89 to 96-97 in a week and a half.

    I think this is just the beginning of getting Japan private savings to head for treasuries again.

    The US requested that Japan(BOJ) not intervene in weakening the yen back when US auto manufacturers first started looking for bailouts in beginning of 4Q08. The Japanese government complied.

    Now I think the market will do it, regardless of official policy actions.

  • Posted by Howard Richman


    There is a very simple explanation of why China’s exports are not falling as fast as its neighbors: China’s stimulus package largely consisted of export subsidies, a fact pointed out by Michael Pettis in his “Smoot-Hawley-with-Chinese-Characteristics” piece.

    By the way, the Heritage Foundation just published an excellent memo on Japan’s trade surpluses and our trade deficits. (They missed the fact that Japan is now experiencing trade deficits not surpluses)

    They are finally beginning to catch on to something that you and I have been saying for quite some time, that more balanced trade is needed. However, they completely miss the fact that US trade deficits are driven by government policies, just as China’s trade surpluses are driven by government policies. They also don’t realize that the policies that the US policies that the Heritage Foundation has been endorsing have driven our trade deficits, as I point out in my discussion of the Heritage Foundation memo in my blog today.

  • Posted by Bob_in_MA

    Could Chinese exporters be channel stuffing? I know that just-in-time inventories are supposed to preclude this, but the inventory/sales figures here in the U.S. have been shooting up. See the graph here:

    The market share explanation seems highly unlikely when we are talking about a period of a few months. I think that would take a few years to show a gap like this.

    I vote for some combination of channel stuffing and massaging of statistics.

  • Posted by Another Charlie

    I think it’s mainly due to China exporting different stuff than the rest of Asia. China exports more non-essential things like drugs and food ingredients. The rest of Asia exports things that get cut easily from troubled budgets like televisions, cars, and Playstation consoles.

    I didn’t know Japan was running a trade deficit. Very surprising. They’ve done everything possible to prevent this and still it happened. Good news if you ask me.

  • Posted by Another Charlie

    non-essential should be essential.

  • Posted by David Heigham

    Surely a Japanese trade defict represents a correction of a global imbalance? As such, it is good news. The bad news is the lack of growth in Japamese consumer demand.

  • Posted by bsetser

    much as i want the global imbalances to shrink, i would rather that they not shrink thru 45% y/y falls in exports. and to date, the main effect has been a shift in East Asia’s surplus from japan to china rather than a fall in east asia’s surplus

  • Posted by Indian Investor

    Brad: much as i want the global imbalances to shrink, i would rather that they not shrink thru 45% y/y falls in exports

    ME: Ok, finally I found the right comment to sign off with, quoting Dr. Amartya Sen, a Nobel laureate in economics, who was born in India:

    “No amount of financial stimulus into the global economy is going to rid the world of recession. We have to get rid of this mindset…the mindset of recession. It’s a matter of psychology than economics.”

  • Posted by greg

    China’s export consists of a very broad range of products. The notion that all China does is to import components from other Asian countries and then assemble them into final products in too simplistic. The competitiveness of China’s export industries is not just due to its low labor cost (and good infrastructure); in many industries almost the entire supply chain and the clusters of supporting industries are in China (think of PC/laptop, electronics and textile etc.). If you’re in the foreign trade or procurement business, you know what I’m talking about.

    On top of that, what China exports are primarily consumer staples whereas Japan’s exports mainly consists of consumer durables and capital equipment, which are the first to cut in a severe downturn like we have now.

    That said, there should be correlations (may be lagging) between the exports of Japan, Korea, Taiwan and those of China. I suppose we will find that out in the next few months.

  • Posted by cdr

    You win the biggest prize mainly by feeding tales to everyone at all time without an inch of retreat. It is sad to some ridiculous to others to see the people in charge of feeding everyone and their scheme with everyone, all at the same time, prevail in this kind of system. It is utterly dysfunctional and in my opinion it will get even further out of control if not reined-in. I have no idea neither when nor if at all this can be done. I do know that Krugman is flat wrong on this point. It should not be ignored.

    I felt that this blog – regardless of the server’s proprietor – was in fact unusual for its moderator and participants hence – in my book at least – the broadly outlined “economic” cut through solution appeared here on this blog as a first. As summed-up a couple of days back (with lack of some mandatory debt to equity swaps for the bondholders’ asset acquiring purpose) and as the “institutional” back-clash shows, that in fact was the right direction proposed. There is always the other side of the trade from increasing the budget deficit on or outright monetization of …fiat insurance. Just cut the crap and stop that trade. It goes for Europe and the euro as well. From now on – same as up until now – it’s all cloak producing pit toilet politics with a difference. It is increasingly easy to see-through.

    I’d like to thank Brad for both the hosting and (partial at least?) understanding. I do hope my mumblings were worthwhile to some of you here. I’ll go my way now and leave some to enjoy their regular fairy tale every evening before bed time.

    For all the rest: keep to your own diligence. Indeed, it was long due.

  • Posted by Glen M

    It appears that it is a global tide receding as opposed to individual countries sinking. I think that it might take a jubilee* to get out of this mess. In a modern sense allow all governments to increase the money supply by 100%. Sort of like a two for one stock split, with the government taking possession of the newly created money. The rich will become poorer. The poor will become less so. I guess in a way it would be like have front loaded inflation with the ability to direct it.

    * See Niall Ferguson

  • Posted by bill j

    here’s some interesting commentary from

    “In a stunning blow to a reeling economy Japan reports that its exports are lower in January compared to one year ago by 45% – nearly halving of the flow. There are several components to this drop. One is the yen that has risen; that will translate foreign currency-based Japan exports into a smaller value in terms of yen. The yen rose to 90.12/$ in January compared to its level of 101.91/$ a year ago, a yen rise of 16%. Another aspect of the drop in value is that yen-based export prices have fallen Year over year. Japan export prices fell by 13.5% Year over year. These two factors make up a good deal of the 45% drop in the yen value of Japan’s exports. But not all of Japan’s exports are in dollar terms.”

  • Posted by Bomlat_

    I made a small analysis about the investment activity in china, using the truck sales.

    I think a simmilar drop is in the pipeline for China too.The reason why we can not see it is the extreme rump up at the beginning of the last year.(and a big build up in the inventory due to this)

  • Posted by bsetser

    bill j — i hadn’t thought of checking to see what fraction of the fall is due to the yen/ dollar conversion. better check and see if it is a 45% y/y fall in $ terms or yen terms (i.e. does japan report its trade data in $ or yen). the yen’s recent appreciation cannot be a big driver of the fall in volumes. classically, appreciate affects the data with a lag — and right now the data would still be driven in normal circumstances by the lagged impact of yen weakness in 07 and early 08. yen strength will hit in 09.

    some of the fall could be explained by the collapse of auto demand. but that cannot explain taiwan, so i am still a bit puzzled …

  • Posted by Noah

    How about the explanation that China is simply cooking its books, waiting for another period of explosive growth so that it can smooth the trend over? That’s what it did in 1997-98.

  • Posted by ZW

    UBS’s Jonathan Anderson published a piece arguing that the collapse in various Asian countries’ exports owes to the concentration in electronics. China does export large volumes of basic manufactured goods and their volumes are still growing. Greg made a similar point above.

  • Posted by Cedric Regula

    off topic today, but today is when the news report came out.

    Bernanke tells Congress he thinks the Fed will be able drain liquidity eventually, when necessary, to head off inflation from the massive increase in money supply that is now circulating thru the economy at a snail’s pace.

    Also mentioned that the new Fed tool of paying interest on bank reserves will make raising interest rates easier. (no need to sell Fed inventory CDOs at the FOMC trading desk and see how much money you can drain from the system).

  • Posted by Rien Huizer

    What a silly interpretation of Japan’s trade figures. Japan’s strongest exporters halted production temporarily. Why: to starve the market of their products, run of inventory of “old” products, introduce new ones and raise prices. If you no not believe this look again 6 months from now at product/pricing policy of Toyota, Honda, Sony, Kawasaki, etc. Meanwhile the weak get their day in the sun.

    “China” is a location. It does not make things and the majority of exports are unthinkable without the agency of foreigenrs, as factory (part) owners, outsourcers, or suppliers of vital ingredients. All China can do is to manage the “chinese” part of the chinese economy to keep people from rioting.

    Anyway, the sharpness of the current crisis demonstrates that modern management concepts really ork so do not be surprised to see a recovery (in macroeconomic terms) within a year. Will that make ordinary americans feel more affluent? NO.

  • Posted by yhvd

    Living in a heavily export oriented country (close to 50% of GDP is related to exports), I’ll admit that I’m pretty happy that our currency have collapsed (down some 40% against $) in the last 6 months. While there ain’t any growth during a collapse of trade, at least business and work force isn’t hit as hard as they would have been with a stable currency.

  • Posted by Cedric Regula

    The thing that makes most sense explaining the difference in export performance between China, Japan, Korea and Taiwan seems to be the product mix of exports.

    China is heavily into low price consumer staples, and feeds into the retail market. Retail by definition stocks a lot of inventory. And Wal-Mart for example has not seen a big drop off in sales. US consumer spending is not down that far, outside of buying cars. Kitchen re-models ended a couple years ago, I think.

    Japan is automotive, electronics,capital equipment, and heavy industry. All of these suffer big time in a downturn.

    Korea is very similar.

    Taiwan is best known for electronics and computer hardware. Here’s wiki article on trade mix. Some other industrial sectors listed too.

    Plus China probably does fudge the data somewhat.

  • Posted by DJC.

    From what I see, China exports more essential consumer products for Western consumers than Japan. For instance, the Walmarts and Home Depots stock entire aisles with compact energy saving lightbulbs that are all “made in China”. Guess what, those lightbulbs are 80% more energy efficient and last upwards of 10 years compared to the older filament lightbulbs. Consumers worldwide are beginning to buy more of these Chinese lightbulbs even during a deepening global recession. Consumers and Businesses are still buying Chinese products that are relatively inexpensive and improve productivity. Chinese-made Notebook computers and Chinese-made Cisco routers still are selling well.

  • Posted by gillies

    brad, thanks for switching the spotlight to japan.

    perhaps 45% fall would require more than one explanation. although we may be ignorant of the detail, i am sure that such a fall would constitute a ‘perfect storm’ scenario. that is to say what went wrong would be : everything – simultaneously and to the maximum.

    common sense says to me –

    1 globalisation synchronises economies, and mobile capital shifts to arbitrage and eliminate any discrepancies that can be turned to profit. so globalisation synchronises the ensuing bust, leaving all wagons and no locomotive.

    2 so dismissing protectionism on the grounds that it slows global growth, is an argument for the good times.
    synchronisation creates a firestorm of growth that burns out suddenly at some point.

    3 and as pointed out above, the category ‘china’ barely exists in the current globalised world. likewise any other nation. the obama stimulus may do as much for ‘chinese’ exports as for the ‘american’ economy. i think that the clinton visit to china was about this. i think that the ‘manipulation’ talk a while ago was the diplomatic positioning and manoeuvering preparatory for this visit.

    4 since the last great depression, the proportion of household expenditure which is discretionary in developed countries, has greatly increased. the proportion spent on e g basic foodstuffs has shrunk. the proportion spent on luxury, status, recreational etc items has expanded. so when we give up or postpone trading in for the latter – the potential self feeding frugality is far greater. among other things germany and japan, w w 2 losers, put their energy into cars that others dissipated / invested in military expenditure. after houses, cars are an item hit severely by an adverse credit environment.

    5 american citizens, now learning to save again, show more wisdom than their leaders, still trying to ressurrect borrowing. that is if the leaders really believe in what they seem to be doing.

    6 if i am right in my intuition that globalisation is like a property boom, in that it seems unstoppable while it is in full flow – but actually has no possible endpoint, except ever more complete collapses, then we are entering upon a period of de-globalisation.

    7 of course we are going to bounce back – in 20 or 30 years or so a lot can happen. but before that we may have to suffer falling off the cliff that lies at the bottom of the cliff. the japanese may be the ones to show the way.

    8 the most dangerous misunderstsndings are not falsified figures but basic assumptions. ‘decoupling’ was some kind of spin. no one ever put numbers on it. no one ever reconciled ‘globalisation’ and ‘decoupling.’ now decoupling is seen to be a mirage.

    9 no one has yet put numbers on ‘bouncing back’ or on hitting the bottom. maybe synchronised global crunch has no bottom, this side of political upset that pushes towards deglobalisation and nationalist/protectionist policies.

    10 or maybe the turnaround comes as a mortgage payers’ strike. or as a boycott of banks and a retreat to community run credit unions, with fully transparent modes of operation. or a mass global write off of debt – such as ended the tulip mania. debts declared non recoverable other than a small percentage. game over. back to the bread and butter economy. garden centres are doing well, as people see the spring coming and make plans to put in some spuds and cabbage. even in ireland the unemployed go back from the coastal cities to their home farms to lick their wounds . . . .

  • Posted by seatrus

    I doubt the Chinese government would exaggerate the export surplus nowadays, because the noise of protectionism is getting louder by the day. The individual companies are hard to say. Some of them might cook the books if they deemed that the rise in stock prices of their company were more than offsetting the additional taxes they had to pay by exaggerating the numbers.

  • Posted by Stefan


    Next surprise from Japan will be soaring domestic prices, I think.

    In the 90s, they did not allow foreign trade to balance. Instead the JPY was kept low and savings were accumulated abroad.

    Now rebalance has come. Baby-boomers are becoming pensioners, and everybody has planned to use his/her savings for consumption. Result: weakening yen, increasing domestic demand and HIGHER PRICES.

    In the 90s, the Japanese should have allowed the JPY to appreciate. Resources would have been relocated from exports to the domestic economy. Now there will appear all kinds of capacity shortages in Japan, I guess. Result: HIGHER PRICES.

  • Posted by Twofish

    It’s rather difficult for the Chinese government to lie about trade figures because you can cross check imports with exports and vice versa.

    I think a more likely explanation is that Chinese exports tend to be very low end cheap manufactured goods, and when people cut back on things, they start first with expensive high end goods like cars and laptops, but still buy cheap low end goods like plastic toys and clothes.

    One point that supports this idea is that Walmart is one of the few retailers that hasn’t seen a major drop in sales.

  • Posted by Seth

    47% decline only because of demand destruction? Despite imploding oil prices? Despite 90% lower ocean shipping costs from last year?

    Lack of credit => lack of ship movement => lower shipping prices and (contibutes to) => lower oil prices.

    Naturally, demand *should* be lower since the level of demand has been inflated by the credit bubble. But it seems to me that credit contraction is closer to playing the “root cause” role here.

  • Posted by bsetser

    gillies actually there was a logic to decoupling — a host of countries that peg to the $ (or manage their currencies v the dollar) imported loose US monetary policy when the US slowed. at the time they were still growing strong — and the monetary loosening they imported from the us pushed their growth up, not down. their exports to the us slowed, but exports to europe kept growing. it wasn’t all a mirage; there was a period when the us slowed and the world didn’t. it just wasn’t sustainable.

  • Posted by Cedric Regula

    Here’s the monthly shipping stats from the Port of Long Beach. This port has the highest Asian cargo container traffic in the US, followed by the Port of Los Angeles in next door San Pedro.

    Unfortunately they don’t make any nice graphs, so you have to browse thru all the monthly reports.

    Monthly comparisons of inbound container traffic (yoy) starting going negative around august 07. They accelerated to around minus 15% thru 1Q-3Q 08. 4Q and to date they run around minus 20-25%. Lehman happened in September, and they were the poster child for the demise of Letters of Credit, I’m told.

    As a side note, outbound containers still posted big gains thruout 08. Some of that goes towards other parts of the world via the panama canal, of course.

  • Posted by Seth


    Thanks for the link to Port of Long Beach data. Shipping volumes clearly have been declining for a while.

    Btw, the only link between Lehman’s bankruptcy and the shortage of letters of credit that I’m aware of is a coincidence of reporters’ attention spans. Right after Lehman there was a spate of coverage of the credit crunch affecting shipping. Then nothing.

    “It’s the cars” seems like a plausible theory for the extreme decline in Japanese exports. Auto demand has collapsed in dramatic fashion. But aren’t most Japanese vehicles sold in the US also built here? I’m not sure when such cars hit the Japanese export number — when Japanese-made parts arrive in the US? Or when the car is sold?

  • Posted by ReformerRay

    The Japanese economy may not be as dependent uopon exports as we commonly assume. Exports divided by GDP by year:
    2006 = 16%
    2002 = 11%
    1996 = 10%
    (from Pocket World in Figures, 2009, 2005, 1999, The Economists)

    The traditional export surplus countries have dollars stored up that can help them. It is the U.S. that is in trouble.

    On the other hand, the U.S. has this extensive safety net and service sector employees with fat paychecks (medicine, computers, universities) and retirees. Lots of U.S. households avoided excessive consumer spending. When prices of houses decline enough, the recovery will begin in the U.S., perhaps before the rest of the world.

  • Posted by ReformerRay

    Cars made in the U.S. cannot be exported to the U.S. Car parts make overseas can be exported to the U.S.

  • Posted by ReformerRay

    I should have noted that those pesky speculators in housing that caused us so much trouble are still sniffing around the housing market. Ironic – if the characteristic that helped created the bubble could help us recover from the bust.

  • Posted by DOR

    January data is always a bit weird in Asia, but not that weird. The China-Taiwan-Hong Kong data are Chinese New Year-weird; Japan and Korea are not.

    Of Japan’s ¥2.9 trillion (45.7% — that’s in yen terms; -35.2% in dollar terms) drop in exports, 59.2% came from lower sales to Asia (-51.7% yoy), 21.9% the US (-52.9%) and 15.7% Europe (-46.2%).

    Of the ¥2.1 trillion (-31.7% in yen, 18.6% in dollars) drop in imports, 33.8% were from Asia (-25.4%), 11.5% the US (-35.0%) and 7.5% Europe (-22.3%).

    Add dying consumption abroad to tight credit and a 19% rise in the yen vis-à-vis the dollar and things happen.

    = = = = =

    Mr Setser, North-east Asia’s trade surplus (Japan, China, Korea, Taiwan, Hong Kong) fell by $80.3 billion last year. Add ASEAN and the total rises to $96.0 billion.

    = = = = =

    Howard Richman,

    Not much “export subsidy” in infrastructure construction, is there? And, given that China’s external demand is dying, export subsidies wouldn’t do much good, would they?

    You need a new answer, sir.

    Re, Michael Pettis, check source: the old article says that on Nov 12, 2008, Zhou Xiaochuan said China “could” depreciation its currency. Since that date, the Rmb has depreciated 0.22% against the US dollar . . . not exactly “Smoot-Hawley-with-Chinese-Characteristics” is it?

    = = = = =

    Reien Huizer,

    Anyone who thinks any exporter in Asia is expecting to raise prices in a few months is, well, “differently clued.”

    = = = = =

    Bob_in_MA, “Chinese exporters” is a common misperception. Actually, 60% of China’s exports are by foreign-invested companies. So, a more accurate phrase would be “exports from China.”

    = = = = =


    The yen averaged 118.8 in 1990-99, and 113.9 since then. If you really think a 4.3% difference is why prices in Japan collapsed in the 1990s then you may want to recheck the data.

    = = = = =


    Hong Kong exports more wine to China than China imports from the entire world. Yeah, trade figures are harder to fudge, but it does happen. Rule of thumb: 20% margin of error on every single bit of Chinese data.

    = = = = =

    greg knows what he’s talking about: China isn’t just an assembler of Asian components anymore. Not for many, many years.

  • Posted by ReformerRay

    Betser says: ” classically, appreciate affects the data with a lag — and right now the data would still be driven in normal circumstances by the lagged impact of yen weakness in 07 and early 08. yen strength will hit in 09″. Correct statement of Standard view. I like to look for exceptions.

    Price adjusted broad value of the dollar was 104, 111, 125, 123 in April then September of 1982 and 1985 (shows dollar appreciating). Total dollar value of U.S. exports; 1982 = 211; 1985 = 216 (billions). After 1982 was the first time in U.S. history (since 1960) that the succeeding years exports were LESS than the preceding year.

    Conclusion: value of the dollar after 1981 had a direct and immediate effect in shutting off U.S. exports. (in the year of 1978, index of dollar value was down – 88 and 85)

  • Posted by ReformerRay

    I didn’t provide the best data to support my point above. Total value of U.S. exports in 1981 was 237 billion. It was the years after 1981 that showed the decline in dollar value of exports. Exports did not rise above 237 billion until 1987.

  • Posted by Cedric Regula


    Honda and Toyota have quite a few assembly plants in the US. But major and minor components to assembly plants count as imports to the US.

    I think Mazda(Ford) and the rest are all built in Japan.

    The credit crunch started around Bear Stearns time in march 08.

    But money market funding of short term corporate cash flow, Letters of Credit facilitating international trade, and consumer and business investment loans are all different animals.

    It seems the animal kingdom smelled smoke in the forest, and all stampeded at more or less the same time.

  • Posted by ReformerRay

    Sloppy me. Above data on exports are for goods only – U.S. Census data – BOP.

  • Posted by Cedric Regula


    I’ve been looking for that Hong Kong wine in stores around here, but haven’t seen any yet.

    When do they plan to start exporting to the US?

  • Posted by DOR

    Obviously, most of the wine is imported to HK and exported to China. But, I’ve got a huge jar of local rice wine I can let you have very cheap!

  • Posted by bsetser

    DoR — the fall in e. asia’s trade surplus is to be expected. it imports a lot of oil/ other commodities, and oil’s average price in 08 was high …

    thanks for the breakdown of the yen v dollar trade data re Japan.

    agree that china makes a lot more components now than it used too.

  • Posted by Howard Richman

    Dor writes, “Not much “export subsidy” in infrastructure construction, is there? And, given that China’s external demand is dying, export subsidies wouldn’t do much good, would they?”

    I do not object to the parts of China’s stimulus plan that moves forward planned infrastructure projects and that stimulates credit that is available to the Chinese people. It is just much too little.

    But I do object to the fact that China is increasing her export subsidies and preventing the RMB’s appreciation. I agree with you that these parts of her plan do not do much good to China or to anyone else.

    As I noted in my blog today, if China did what we are doing they would get out of the recession and if we did what China is doing we would get out of the recession. Too bad we can’t just trade economic advisors.

  • Posted by Orlando

    This pork filled stimulus bill will help no one…..