Don't tell us tell Bloomberg, WSJ and the Economist!
Chinese Economics Thread
- Thread starter Norfolk
- Start date
Chinese New Year was on Feb 10th this year and some residual effects of the holiday will linger into March. Last year's Chinese New Year was on Jan 22nd.
Because the timing of the Chinese New Year has such strong effects on Chinese economic activity in the first 3 months of the year, YoY comparison of individual months in Q1 are generally not meaningful and comparing the entire Q1 quarter YoY gives a far more accurate picture.
Of course, Western media have all been jizzing in their pants over China's poor YoY numbers for February and March while ignoring the fact that the YoY Q1 numbers look quite healthy. When April numbers come out, they will be singing a different tune.
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Exports shrinking is natural given that Western economies are speedrunning impoverishment. As for imports, a lot of this are imports of raw materials that go into exports so that's expected to shrink. Another factor is China paying for more imports in RMB, which produces the statistical artefact of "shrinking" imports since China isn't overpaying with USD.
If we look at the historical data, in particular pre-covid, then March 2023 seems like an outlier; being unusually strong compared to subsequent months. Don't think the moving Chinese New Year is enough to explain it either as it doesn't give a similar pattern for previous years.
This is where you probably need an expert to explain why this happened in 2023 and whether these factors persist for 2024. While Im sure such experts exists, I doubt their assessment will show up in the press and rather stay hidden behind a $5000 paywall.
I believe the March 2024 yoy numbers were below expectations because of the high base effect last year (in March 2023, exports rose 14.8% yoy and were at their highest point historically at around $300 billion USD). The actual vs expected yoy % change is (I'm assuming) based off of predictions from multiple years in the past, it's just that for March 2024 the previous year's March export numbers were untypically high.
Looking at March 2024's exports, they stand at roughly $280 billion USD which is the second highest value historically.
Don't think you need an expert. COVID restrictions were lifted in Dec '22 which was followed by a massive wave of COVID infections that winter. March was when the country emerged from that ordeal resulting in a rather strong rebound effect.
The dollar has been strengthening against the yuan and various other currencies. Global capital is investing more in the US due to various reasons, the most important being high interest rates. This is one cause of the “US economy is great” perception since higher debts are being off set by more international investment.
That's not strange the Yuan has lost a lot of value vs the dollar last year.