I liked John Authers’ FT column on China, and basically agree with it.
The chart showing the correction in the yuan’s value against a broad trade-weighted index is especially helpful. A lot depends on the particular index you use, but there should be no doubt that a significant part of the yuan’s broad appreciation in late 2014 has now been reversed.
I did take issue with one point. Authers writes that both Chinese exports and imports are on a declining trend.
“Chinese exports dropped noticeably last month (causing a frisson in global markets). Meanwhile, imports ticked up, suggesting at least some life in the Chinese economy. Both imports and exports are on a steadily declining trend, so China’s economy is slowing down.”
That is true in dollar terms, but not in “volume” (or real) terms.
Using China’s own data for the year to August, exports are up a modest 1.8 percent (versus the same period a year ago), and imports are up 3.4 percent. Throw in an estimate for September’s volumes (-1 percent on exports, + 1 percent on imports: this is without any adjustment for working data) and the numbers dip a bit, but still positive year over year (1.5 percent for exports, 3.1 percent for imports).
On the export side, q1 was bad—export volumes were down a couple of points (the 2014 q1 base was a pretty good, which is part of the story. But I think q2 and q3 both show roughly 3 percent y/y growth in export volumes—a strong August is offset by a weak September.