Ep 86 - The weaknesses behind China's booming exports

About this episode

China’s manufacturing output just grew at the fastest pace in six months, but retail sales barely moved last month – and the gap between the two growth rates just hit its widest point in over three years. The upshot: Exports are still picking up the slack. • But an increasing chunk of China’s export growth is simply down to price increases, not rising volumes. • So even that stalwart economic prop is starting to wobble. On this quick-reaction episode of the Trivium China Podcast, Andrew Polk sits down with Joe Peissel (Trivium’s Lead Macroeconomist) to unpack: • Why the gap between factory output and consumer spending just hit a three-year high, and why Beijing’s own policy playbook keeps worsening the imbalance • The hidden story in China’s “booming” exports: value is up 25%, but volumes for things like semiconductors and appliances are actually falling • The one semi-bright spot in the monthly macro-econ data: infrastructure investment is declining at a slower pace (hurrah!) • Why Beijing’s new interest-rate subsidy for consumers is aimed at the wrong problem entirely Putting it all together: China’s economy will continue to decelerate into year-end. Give it a listen and let