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China pulls December trade statistics
Howard Richman, 1/11/2015

China in 2015 is like the United States in 1929. It has grown rapidly by practicing mercantilism. Instead of buying imports from its customers, it destroyed the market for its exports. The Chinese stock market may be about to lead the world down into an economic recession.

The Chinese stock market began tomorrow morning's (Monday's) trading in free fall after the default of a Chinese property developer. Zerohedge.com reports:

The last session in China on Friday provided an epic roller-coaster as exuberant retail BTFD'ers met their match with fading inflation and surging default risk concerns. The Monday session has opened to more of the same - with the Shanghai Composite opening down another 1.3% and erasing all the year's gainsAs Shanghaio Daily reports, the Chinese property developer Kaisa Group Holdings (that we have discussed in detail here and who's next herefailed to repay a US$26 million bond coupon, making it the first Chinese property firm to default on dollar bonds.

Meanwhile, in a supposedly unrelated development, Reuters reports that the Chinese government briefly published its trade statistics for December 2014, and then pulled them:

(Reuters) - China's trade will grow 3.5 percent in 2014, implying the country will fall short of a current 7.5 percent official growth target, according to a report on the Ministry of Commerce's website that was subsequently revised to remove the numbers.

The initial version of the report published on the website on Saturday, which quoted Minister of Commerce Gao Hucheng, was replaced with a new version that had identical wording but with all the numbers and percentages removed. 

Don't forget my December 24 posting regarding China's slowing economic growth based upon the statistics through November. I wrote:

Chinese imports only grew at a 1.6% clip for the year ending November 2014. as compared to 7.1% for the previous year, and 4.7% for the year before that. 

Imports are a particularly difficult statistic to fudge, since each entry appears as imports on the Chinese books and as exports on the books of a Chinese trading partner. The import statistics suggest very little growth in the Chinese economy since February.

Fasten your seat belts. The roller coaster has peaked and it could be a rapid ride down!

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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

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  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

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  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]