• Chinese money supply leads imports ~10 months
• M1 Supply y/y growth weakest/sharpest drop in decades
• Suggests 20% collapse in imports

Red Flag for Red China

The advantage of tracking container volumes is that we can bypass inflation and price distortions.

Simply put, on a container volume basis, Chinese imports are struggling: -7% y/y.  Container throughput has fallen 20% in the last 2 years.

The Chinese economic miracle is fading.  Unemployment is 5.3% in the cities and 17% among youth 17-24 years old (ex students).  Goldman, Citi, JP Morgan are all expecting growth of <5%.

The housing sector is the point of focus.  Housing asset values supported the consumer economy but prices have collapsed.  The latest month: -7% y/y.  The Chinese consumer won't spend until housing prices stabilize. The housing bubble must be reinflated.