Infographic- China’s Forecast March Trade Deficit May Reduce Pressure on Yuan

From Bloomberg:

China is forecast to report in coming days that it ran a trade deficit in March for the first time since 2004, underscoring the country’s reduced reliance on exports for growth and giving Chinese leaders a possible argument against concerns that the yuan is undervalued.

They have a really cool Flash time series of the data, check it out.

http://www.bloomberg.com/insight/china-trade-forecast.html

Here’s a screenshot. They also break out percentages of deficit relative to GDP and YOY changes to export growth:

“A Chinese trade deficit would underline the country’s growing reliance on its domestic market rather than exports as its most important source of growth. In 2008, the most recent year for which government figures are available, China’s household consumption accounted for 35% of its GDP compared to 7.9% for net exports, the excess of exports over imports.”

I, like a lot of people, thought China was doing most of their heavy lifting for us (America). I was wrong. While we’re struggling to get our house in order, they are doing big things. Although, Jim Chanos (who famously called the Enron collapse) has been saying for awhile now that China is a huge bubble (“Dubai times 1,000”, he says. Hmm.

The US Treasury leaning on China to allow the Rembini to float

+ plus the internal pressures to sustain growth

+ plus the staggering amount of treasuries the Chinese hold (some $2 trillion)

+ military tensions (Taiwan) and cultural frictions (Google)

+ bring to boil and stir well.

What do you get? Not really clear yet. But closely tracking……..