Chinese Exports Plunge 11.2 Percent As Economic Activity Continues To Collapse All Over The Planet

If the global economy is in fine shape, then why does all of the hard data tell us that global trade is absolutely collapsing? The Baltic Dry Index has fallen below 300 for the first time ever, and export numbers are way down for almost every major exporting nation on the entire planet. As you will see below, this includes China. The Chinese account for more global trade than anyone else, and so the fact that their imports and their exports are both collapsing precipitously is a huge red flag.When less stuff is being bought and sold and shipped around the world, that tells us that the “real economy” is contracting. Tremendous efforts are being made to try to prop up financial markets all over the globe right now, but in the end those efforts are going to prove to be rather futile. The global economy is clearly plunging into recession, and at this point it is becoming exceedingly difficult for even the most optimistic economic analysts to deny this reality.

Cargo Ship - Public Domain

When the trade numbers for China for the month of January were released, they were an extreme disappointment. The following comes from CNBC

China‘s exports fell 11.2 percent on-year in January, while imports declined 18.8 percent, clocking far bigger slides than expected by analysts.

Analysts polled by Reuters had expected a 1.9 percent drop in January exports, and a 0.8 percent drop in imports, after China’s exports fell 1.4 percent in December from a year earlier and imports slid 7.6 percent .

We never see numbers like this outside of a recession.

Never.

Chinese imports have now fallen for 15 months in a row, and the second largest economy on the entire planet appears to be in the process of imploding. As I mentioned above, China has become the most important hub for global trade.Nobody accounts for more total trade than they do, and so these new numbers can only be described as catastrophic.

Other numbers are telling the same story. Global trade has fallen so dramatically that it is now cheaper to rent a 1,100 foot merchant vessel that than it is to rent a Ferrari…

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Alex Ku 3 years ago Member's comment

Hi Mr. Snyder.

I am from the Philippines and am not quite sure how this will affect us. I would like to solicit your kind advise as to how best to cope up with this global crisis.

Money placed with bank equity funds and UITF here have also dipped considerably. Would you suggest to pull-out and lose approximately 20% of our principal investment and stop the bleeding or continue waiting hoping that market will still bounce back? TIA.