China And Deflation: This worse-than-expected slump in exports is probably even worse than admitted

China’s July exports slump 8 percent, raises pressure for more stimulus
Aug 8, 2015
BEIJING/SHANGHAI (Reuters) – Chinese exports tumbled 8.3 percent in July, their biggest drop in four months and far worse than expected, reinforcing expectations that Beijing will be forced to roll out more stimulus to support the world’s second-largest economy.
Imports also fell heavily from a year earlier, in line with market forecasts but suggesting domestic demand might be too feeble to offset the weaker global demand for China’s exports.
Economists had forecast exports to fall just 1 percent, after a 2.8 percent uptick in June, but the data on Saturday showed depressed demand from Europe and the first drop in exports to the United States, China’s biggest market, since March.

This data confirms the idea of a pronounced slow down not only in China’s economy but Europe’s and the US as well.
No matter how much stimulus the Chinese authorities apply it’s going to be hard to change any of these import and export statistics by any other means than by massively devaluing the yuan.
Here’s a bit of data that suggest Australia is feeling the pinch:

Port Hedland iron ore exports slip in July
Aug 6, 2015
Iron-ore exports from Australia’s Port Hedland fell by 8.8 per cent in July compared to the previous month, the local port authority said on Thursday. Iron-ore shipments for the month totalled 35 million metric tons, down from the all-time high shipments of 38.4 million tons in June. The port’s July total was also a decrease of 775,000 tons, or 2 per cent, from the same month in 2014, it said.

Notice that the statistics above are given in tons, but the Australian dollar has fallen by a lot over the past year, so measuring the economic impact would reveal a much steeper decline than the tonnage suggests.
Because the yuan is pegged to the dollar, this is a fair representation of the impact.

image: http://www.peakprosperity.com/sites/default/files/users/u4/aud_to_usd_2015-08-08_10-31-03.jpg

ouch!
Less tonnage and a vastly lower AUD = a big economic impact.

Chris

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investmentwatchblog.com / by IWB, on August 9th, 2015