[Quonuttott]

And to think, they were criticizing us on our stimilus package.

[ordercigsnick]

China's has got to be reeeeealy bad, I'd imagine. That trade imbalance is really screwing with them now. And of course, seeing as that's who we had buy the US's debt for all these years, it may create a really bad cycle.

[derty]

I thought I saw a 0% Q4 growth estimate for China somewhere.

edit: The Chinese came out today with their 6.8% estimate of Q4 2008 growth. China publishes its quarterly GDP figure on a year over year basis, differently from the U.S. and most other countries that publish their GDP growth figure on a quarter on quarter annualized seasonally adjusted (SAAR) basis.

When growth is slowing down sharply the Chinese way to measure GDP is highly misleading as quarter on quarter growth may be negative while the year over year figure is positive and high because of the momentum of the previous quarters’ positive growth.

Indeed if one were to convert the 6.8% y-o-y figure in the more standard quarter over quarter annualized figure Chinese growth in Q4 would be close to zero if not negative.

Other data confirm that China was in a borderline recession in Q4 and that it may be in an outright recession in Q1: production of electricity plunged 7.9% in y-o-y basis; the Chinese PMI has been below 50 and close to 40 for five months now.

And with manufacturing being about 40% of GDP , manufacturing is certainly in a sharp recession (negative growth) and the overall economy may be close to a recession

So the 6.8% growth was actually a 0% growth – or possibly negative growth – in Q4; and the Q1 figures look even worse. So China is in a recession regardless of what the highly massaged official numbers claim.

http://www.rgemonitor.com/roubini-mo...he_new_size_68

[JulietOreira]

But Canada seems ok.

Curious.

I guess it's because of what we export!

[Abraham]

Not so fast, Ben:

http://meganmcardle.theatlantic.com/.../oh_canada.php

Though Canada is in a far better position due to intelligent government policies.

the comments to that blog.

On topic, we aren't waiting for the bad news. It's here.

Exports
http://www.globeinvestor.com/servlet...ADA12/GIStory/
From wheat to oil to steel to car parts, Canada's exporters are being hammered by the collapse of global trade.

Numbers released by Statistics Canada yesterday revealed an astonishing 9.7-per-cent plunge in Canadian exports in December, as almost every sector, from agriculture to energy to telecommunications equipment, saw a drop in the value and volume of goods leaving the country.

While imports also shrank, the export slowdown pushed Canada into a trade deficit for the first time since March of 1976.

Even shipments to the United States fell by 10 per cent, taking a bite out of the bilateral trade surplus that Canada's economy has come to depend on.

One big reason for the sharp decline in exports was the plunge in the prices of commodities - particularly oil - which pushed down the value of many of the products that did get sold outside the country. The value of exported crude petroleum, for example, fell by almost one-third in December.

"The combination of a collapse in commodity prices and a collapse in U.S. demand took a meat cleaver to exports," said Douglas Porter, deputy chief economist at BMO Nesbitt Burns, calling the trade report a "watershed" in Canadian economics.

The decline cut across almost all sectors, with the value of wheat exports falling by more than 20 per cent, industrial goods and materials seeing a 17-per-cent drop, and forest product exports declining almost 5 per cent.

Job losses in January.
http://www.statcan.gc.ca/subjects-su...fs-epa-eng.htm
January 2009

Employment fell by 129,000 in January (-0.8%), almost all in full time, pushing the unemployment rate up 0.6 percentage points to 7.2%. This drop in employment exceeds any monthly decline during the previous economic downturns of the 1980s and 1990s.

The loss in January follows other declines in recent months. Since October, employment has fallen by 213,000 (-1.2%), the result of full-time losses.

In January, the drop in employment was most pronounced in manufacturing, where the net loss totalled 101,000. There were declines in a number of other industries as well. The only industry with notable gains was health care and social assistance, where employment increased by 31,000.

Canada's three largest provinces accounted for the entire employment decrease in January. While just over half of employment losses were in Ontario (-71,000), there were also large declines in both British Columbia (-35,000) and Quebec (-26,000). Employment was little changed in all other provinces.

Employment fell mostly among core-age adults, 25 to 54 years, as well as among youths aged 15 to 24.

[Britiobby]

What's the alternative for countries like Japan?

[MizzDaizzy]

Japan needs massive amounts of infrastructure spending to remove all the infrastructure they built in the '90s.

[cialviagra]

There are enough concrete-covered mountains and coastlines filled with massive concrete tetrahedrons to keep them stimulating for years and years.

[Mr Andrews]

Yeh, what's the objective of those slag-heap tetrahedrons anyway? You would think that they would do something useful like bury the power lines.

[toksenveste]

They've mistaken themselves for Venetians.

[in4wikiu]

You would think that they would do something useful like bury the power lines.

Or insulating their houses.

[Wvq9InTM]

This is looking incredibly grim for export oriented economies. Japan's January exports from January a year ago dropped 46%, compared with the December drop mentioned above of 35%.

I find it increasingly difficult to believe China's January exports drop of only 17.5% -- just seems off to me. It's true that car sales are being hit disproportionally and China doesn't make too many cars for export. But... Well... Looking at all of its Asian industrialized neighbors... Maybe China's February figures will be more realistic.

[IvJlNwum]

Maybe China's February figures will be more realistic.

That's a good one, Dan!

[bredkumanfirst]

Increased domestic consumption. I have some ideas about what they might do to encourage consumption.

I've discreetly tried to push for this idea on a very local level for a few years now. An export economy is a slave economy, giving away the fruits of it's labour and being dependant upon others. Truly developed economies consume around as much as they produce.

Less punitive taxes on consumers, less government-advocated guilt over consumption and invididual investment.

the export slowdown pushed Canada into a trade deficit for the first time since March of 1976. How is this a bad thing?

[kucheravka]

Following up on this, Japan's February exports dropped 49% versus February 2008. Over the last few days, there's been lots of talk about China leading us out of the recession, but I don't buy it one bit -- it must be experiencing much the same decline as Japan.

http://online.wsj.com/article/SB123794147736232741.html

I suspect the fact that China produces a lot of cheap stuff and Japan produces relatively more luxuries would justify some of that difference. It's not just cars.

Keep in mind that some discount retailers domestically haven't seen the same fall in sales as the average. Some of that fall in Japanese exports is people switching to cheaper alternatives.

[gorbasevhuynani]

we can afford

i don't think you understood.

if neverending trade surplus is the default state to be desired, how come every nation in the world doesn't have a trade surplus?

[Pharmadryg]

how come every nation in the world doesn't have a trade surplus?

Because it's zero-sum. For every dollar in surplus, another country has a dollar in deficit.

[Encannavalf]

i don't think you understood.

if neverending trade surplus is the default state to be desired, how come every nation in the world doesn't have a trade surplus?

I think the answer to that is pretty obvious .

Canada imports more finished goods and services than are exported. The bulk of our export surplus is in raw materials for the rest of the world. But you have to realize Canada is fairly unique in being a rich economy based on exporting raw materials.

[Petrushkaukrop]

Both of you are retarded.

VJ's right.

Lord, how I hate saying that.

[reaciciomarep]

A trade deficit means you want more than you have presently, but can afford to import goods, which is good in the short term but bad in the long run. A surplus is bad in the short term, since you are producing more goods than are required in your nation, and devalues your currency, but good in the long run because it prevents budget deficits.

A trade surplus prevents budget deficits?