More bad trade data from Asia

Taiwan’s December exports are down over 40% y/y — largely because of a huge fall in exports of electronic components to China. The fall topped expectations. It adds to the mounting evidence that the current global deceleration is quite sharp and quite deep.

Taiwan’s imports are also down by around 45%. Thank the big fall in commodity prices. Taiwan managed to post a trade surplus in December even with the enormous fall in its exports.

Korea’s exports were also down in December — though the 17.4% y/y fall in December wasn’t quite as large at the 19% fall in November. Imports though fell by more — over 21%. And Korea also posted a (small) trade surplus.

My guess — based on the fall in Taiwan’s exports to China and the fall in commodity prices — is that China’s December trade data will show a quite significant fall in imports, keeping China’s surplus large even as China’s exports fall sharply.

The large fall in Germany’s November exports highlights that the slump in trade is global. Japan’s exports fell by more (in percentage terms) than Germany’s exports in November. US exports are almost certain to start shrinking too.

Expectations have been revised down dramatically, but most data points still seem to be worse than expected. That worries me.


Originally published at the CFR blog and reproduced here with the author’s permission.

4 Responses to "More bad trade data from Asia"

  1. Guest   January 12, 2009 at 10:40 am

    Michael Pettis and Brad Setser continually complain about the high Chinese savings rate. So what do you want the Chinese goverment to do? Even under Communist rule, it isn’t possible for the government to hold a gun to the collective heads of the Chinese savers to force spending. The Japan Central Bank has held interest rates at Zero percent for the past decade (ZIRP) but that hasn’t induced the Japanese public to spend. Frankly, a majority of Asians have lived a large portion of their lives in extreme poverty and simply aren’t culturally inclined to wasteful consumer spending.Is a Chinese “Savings Glut” really responsible for US Economic Imbalances. It’s really a stretch of the imagination to blame Asian savers for America’s overconsumption problem. The US landscape is now littered with ugly McMansions from coast to coast. Oh please, did the China PBoC really force American consumers into purchasing McMansions, speculating on luxury condos in Florida, or leasing the latest model gas-guzzler SUV?Moreover, if the Washington Consensus were truly concerned about the US Trade deficit, Cold War restrictions prohibiting high-tech exports to China would be lifted. Recently, a Chinese-American was prosecuted by the US Dept of Justice for exporting European rocket fuel compression technology. Every single export of Boeing Aircraft requires the US President’s signature. Satellites, supercomputers, semiconductors, machine tools, composite materials remain on the prohibited list for export by the Pentagon which fears erosion of US global hegemony.

  2. Guest   January 12, 2009 at 4:56 pm

    They could let their currency rise and not recycle dollars back into the US economy thus limiting future surpluses, or the US can go to an implosion, significantly reduce the value of the dollar, reverse trade and investment patterns and start exporting to China, after all this is what China did in 1994, with its one-off devaluation of the Yuan by 45%. Before 1997, talk talk talk of Asian Tigers, since 1998 only China. Hmmmmm, wonder why?

  3. Guest   January 13, 2009 at 4:18 am

    The real problem is we can’t have a world based on simply reducing the costs of production, increasing company profits and debt levels of individuals. This is a guaranteed formula for economic collapse – oh it’s happening already silly me.

  4. Zaemon   January 13, 2009 at 6:58 am

    It’s another blue sky day here in Beijing. We have been seeing a lot of them lately. The pollution has just gone away. I think it’s because the migrants have gone away and are not burning coal for heat anymore.Others speculate that heavy industry has shut down.On a recent trip to Hubei Provence the pollution was quite bad so obviously people are burning a lot of coal there. I also saw a petrochemical plant spewing out the smoke, but here in Beijing, there ain’t nothing but blue skies.Today was a day off and I toured the industrial suburbs of Beijing. There were so many shut down factories; huge state of the art things overgrown weeds where the grass should be and sand piling up around the locked gates.We hear the best measure of an economy is electricity consumption. Apparently it’s down 20% and I read a few years ago most electricity here is consumed by factories.Imports down 20%Electricity Consumption 20%Shipping down 20%At least 20% of factories shut down as per my 2 tours of random industrial areas. (Though I would say it was closer to 30% but I did not stop to confirm each closed place I saw)I simply cannot believe in a -20% world that Chinese exports are down 2.5%. In the other big exporters they are down like what, 20% or something?What we seeing these days is very scary. There is no precedent for any of this.Anyhow; Party on.