- 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.
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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.
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