China posted trade data for January today, following up on a flurry of interesting data points:
|YoY Exports (White line) & YoY Imports (Blue line) - 2006-2012|
Despite the focus on the potential drag from a European slowdown on China, exports, which were stagnant year over year, are essentially beside the point. The real issue is the unsustainable domestic investment economy and with exports flat YoY and imports down 15% YoY this is a terrible data point. There as been a lot of discussion about the comparability of the data owing to the impact of the New Year’s holiday (although the Customs Administration does seasonally adjust their figures), but I believe there is an increasingly clear downward trend in the more reliable data available. For those not up to speed, this is my perspective on China. It is not positive. I’ll return to the bigger picture in a moment, but for now I’d like to return to a subject previously discussed here.