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China Trade Slows Considerably

China’s economy continues to show signs of a dramatic slowdown. According to Trade data for July, exports hit a six-month low and dropped significantly from last month. Meanwhile, imports were up just 4.7 percent, suggesting China’s demand for commodities is shrinking.

These data, together with earlier reports that Chinese growth has slowed to its lowest level since the peak of the global financial crisis, is undoubtedly increasing the pressure on Beijing to take stimulative action. The government will want to keep the economy humming along smoothly during the potentially volatile leadership transition later this year.

But China is still suffering the aftereffects of the massive stimulus program introduced four years ago to combat the global financial crisis. Some analysts think the hangover from that program has left Beijing unable or unwilling to introduce similar measures this time around.

China could also let its currency depreciate, which could spur export growth. But U.S. politics could factor into that option, too. Mitt Romney, notably, has pledged to label China a currency manipulator if he wins the presidency—a reminder that any attempt by Beijing to further depreciate the renminbi could provoke a backlash.

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  • Jim.

    Centrally directed stimulus isn’t the answer.

    Allowing people the economic freedom to start businesses locally, seeing needs and filling needs, is the answer.

    Decision-makers simply can’t be divorced from knowledge of local conditions. Look around you at the mall sometime. See those “Hollister, California” t-shirts? See the ones that celebrate the “Hollister Surf Club”? Guys… Hollister is inland. It’s a farming village, right next to “Garlic capital of the world” Gilroy.

    But people a thousand miles away– or even a hundred miles away– don’t seem to realize that, and wear the shirts as if the place was Hermosa Beach.

    Local awareness, local decision-makers… nothing beats it.

  • J R Yankovic

    @ Jim.:

    I praise our extraordinary techo-literacy – or techno-dependence, depending on your bias – which enables us to think in ways that not only transcend space, but make traditional forms of spatial and geographic knowledge irrelevant. “Hollister Surf Club” sounds really cool. So who cares whether Hollister is miles from the ocean? Where is the glory of cybercommerce if we can’t make a geography to suit our fancy, convenience and profit? As for whether that same progress is “making” us ignorant of knowledge former generations took for granted, what better way to COMPEL advance to the next level than by kicking away the ladder that led to the present tier?

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