World Trade Plunges. Here’s Why it’s Even Worse in Reality: China’s Deep-Fake Data Comes to Light

But the downturn in the goods-based sectors started in 2018. US exports are now down 37% from that peak, imports down 25%.

By Wolf Richter for WOLF STREET.

World trade in goods plunged by 12% in April from March, after having already dropped 2.4% in March from February. This plunge of the Merchandise World Trade Monitor, released by CPB Netherlands Bureau for Economic Policy Analysis, was by far the largest month-to-month drop in the history of the data going back to 2000. Compared to April last year, the index was down 16.2%.

But world trade had already taken a hit starting in late 2018, as tariffs, counter-tariffs, and threats of tariffs jiggled supply chains around. By December 2018, the index was down 1.2% from a year earlier. Year-over-year declines became a regular feature starting in June 2019. Then in March, the index dropped 5.4% year-over-year, and in April 16.2% year-over-year. This brought the index down 18% from the peak in October 2018, and back to where it first had been in January 2008:

US Exports and Imports.

In the US, trade took an even bigger hit, with exports of goods collapsing 25% in April from March and 30% year-over-year, according to the Commerce Department earlier in June. Imports plunged 13.6% in April from March, and 20.2% year-over-year. For the first four months of 2020, US imports from China plunged 24% year-over-year .

On June 25, the Commerce Department released its advance estimates for May, which showed further deterioration in both exports and imports:

  • Exports in May dropped 5.7% from April and collapsed by 35% year-over-year, to just $90.1 billion, the lowest amount of exports since August 2009, and down 37% from the peak in 2018.
  • Imports in May dropped 1.8% from April and 23.6% year-over-year to $164.4 billion, the lowest since July 2010. This was 25% below the peak in 2018.

As the chart shows, the slow-down in the US goods-based sectors started in late 2018 and worsened in 2019 before getting walloped in 2020. I have been documenting this downturn in the US goods-based sectors with various trucking and railroad measures. And it also shows in the trade data. The gap between the two lines (imports minus exports) is the US trade deficit:

The continued deterioration in May in the US is a harbinger of what the trade data for the rest of the world, and for the World Trade Monitor, will look like next month.

The Eurozone

In the Eurozone, exports in April, according to the World Trade Monitor, collapsed by 30.5% year-over-year, and imports by 26.7%, both to the lowest levels in the data going back to 2000:

China’s fake data.

The CPB obtains the data for the World Trade Monitor and for the individual countries from the official statistical data releases by each country. The exports of all major regions and countries plunged in March and April. There is one exception: China. In China, based on the official data released by the Chinese government and used by the CPB, neither imports nor exports ever really got hit this year at all.

This contradicts absolutely everything else we know about trade with China, including what major container carriers have said, and how they have slashed capacity to and from China as trade between China and the rest of the world spiraled down. But miraculously, it doesn’t show up in China’s official data:

China’s data has always been whatever the government wants the world to think it is. But the pandemic elevated China’s data to new and unprecedented levels of deep-fake status all around.

With imports and exports, however, cheating invariably comes to light: China’s exports show up as imports by other countries, and China’s imports are other countries’ exports. When global trade goes to heck in a straight line – in violation of the dictum printed on every WOLF STREET beer mug – but only China’s imports and exports pretend nothing has happened, then we have to wonder: Who exactly was China trading with? The Martians?

And this puts forward a second thought: Given that China’s import and export data were fake during the pandemic, and should have been a lot lower, the overall World Trade Monitor, which includes China’s fake data – and with China being a massive factor in global trade – should have been a lot lower in reality as well.

Household Income Drops from Historic Spike, Spending Bounces off Historic Plunge But Remains Low. Income from wages & salaries remains crushed. Read… A Federal-Money-from-the-Sky Story

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  225 comments for “World Trade Plunges. Here’s Why it’s Even Worse in Reality: China’s Deep-Fake Data Comes to Light

  1. David says:

    It’s going to be interesting to watch what happens over the next month. With the S&P 500 P/E around 23 now, and earnings coming in for the worst economic drop in recent history VS the technical trading crowd who only look at price charts & momentum indicators piling into the market. Even IF the S&P holds 3000, what is the P/E going to be once the 2nd quarter earnings are in – 50? The P/E in 1929 before the crash was around 17 or so. I’m short the market, but I’ve been proven wrong many times before. Good articles BTW. Thanks.

    • timbers says:

      New and different creative ways to report one time accounting charges and back them out of “reported earnings.” That and mooooorrrree QE.

      • Satya Mardelli says:

        Right you are Timbers. In the mid-80s corporate financial wizards introduced EBITDA. That was an adjusted earnings gimmick to make profits appear larger than normal. Now they have a new gimmick – it’s called adjusted EBITDA. Yep, now they are adjusting upward a value that has already been adjusted upward. Where does it all end?

      • Dave says:

        I don’t short the market but I won’t buy it either here. Cash is King with 150k itching to go into the market. Many stocks I watch are selling at September 2019 values. Crazy. I see mass layoffs of decent jobs ahead as companies thin to stay alive. Good time to be retired.

      • joe2 says:

        Nice analogy.

    • sunny129 says:

      One could go short on the mkt but NOT without hedges, when Fed threw 3 T in March without batting an eye. The virus epidemic-crisis is not going away soon. What makes any one think that it won’t throw another 3 T, again? Who is going to be against it? Dems already have 3T stimulus plan on the table!

      They are now supporting the Corp credit mkt, openly! Japan & Sweden CBers are already buying ETFs and stocks! Why NOT here!?

      USA DEBT roll call
      2008 2020
      Total Nat’l Debt 52.6 T 77.6 T (+ 25 T since ’08 48% increase)
      Debt 77.6 T to GDP 21T – 3x GDP

      Total Business debt 10.T 16.8T (Corp & non-Corp)

      Business Debt as Percent of GDP:
      1955: 31%
      1970: 47%
      1980: 49%
      1995: 55%
      2007: 69%
      2020: 78%

      h/t Stockman

      Who can bet that Fed stops here!!?? I have been burnt more than dozen times by trying to short the mkt over the last 10 yrs, off & on. Never lost a penny during GFC when Free Mkt with Price discovery was allowed. Not any more! We are in LA, LA Land of the Fed and their cronies at the Wall ST and the top 10%.

    • Joe says:

      So the sky is falling? Well, in America, the online store are filled with imported items- that we seemingly cannot live without. LOL

    • John York says:

      US has to decouple from China, probably the worst player on the world scene. End it already. Kick then out of WTO. Then watch it burn.

      • Luis Eduardo Toulson says:

        Congratulations for your excellent comment/suggestion.
        Luis Toulson

    • Morty Mc Mort says:

      So Much Fraud and Lying in the total System – This is a Slow Train Wreck.
      It is going to take time for all the Dominoes to fall…
      And at the end of it all – Surprise!! Daddy Warbucks owns anything worth owning.. and you.. serve the Man…

  2. Concerned American says:

    Tariffs are just another form of protectionism. Didn’t we learn anything from the Great Depression which was exacerbated by protectionism?

    • Cas127 says:

      Diversification away from a single point of failure (China) is not (gasp!) protectionism.

      And reshoring some manufacturing capability seems to trigger hysteria in trade absolutists the way that cost-effectiveness (deflation!!) triggers a different set of absolutists.

      Such hysteria blinds the absolutists to the multiple empirical failures of their theory-based world views.

      Otherwise, the US would be chock full of six figure bioengineers who we were told were going to take the place of millions of offshored manufacturing jobs.

      Instead the US has had the worst 20 years of job growth likely in its history.

      So fewer and fewer people are going to get spun up just because your half-accurate absolutism is being traduced.

      • Concerned American says:

        Who mentioned diversification? I have no issue with diversification and would in fact encourage it. My beef is with Trump’s tariffs which are a form of protectionism.

        • hidflect says:

          Part of the government’s role is to enforce behaviour that people wouldn’t voluntarily undertake like setting speed limits on roads. Tariffs are a way of disincetivising over-reliance on Chinese production. So, yes, it’s protectionism but there aren’t any realistic, alternative approaches they could make. Rules always have some negative consequences.

        • Javert Chip says:

          Tariffs can be looked at as protectionism, or negotiations (Trump has long been on record to eliminate ALL tariffs).

          For decades, China & EU have been charging the US higher tariffs than the US charges in return. For example, EU Tariff on importing US automobiles is 10%; US tariff on importing EU automobiles is 2%.

          Some of this dysfunction is a hang-over from WWII, when the US (in addition to the Marshall plan which feed Europe), gave favorable trade preference to establish war-torn economies. Europe continues to abuse this “special” treatment to this day.

          Years and years of polite “negotiation” failed to resolve the issue, so Trump unilaterally raised US tariffs to match our trading partners. All of a sudden everybody is more open to negotiating reduced tariffs.

        • Jessy James says:

          It’s a little more than that. President Tweet wants the world to see the Chinese as they really are–miserable bulls#itters. It’s a case of the pot calling the kettle black. I can ONLY IMAGINE just how fake their coronavirus statistics are.

        • Lance Manly says:

          The EU may charge 10% on autos, but the US charges 25% on trucks. The EU offered to eliminate its tariffs if the US did the same. The US did not take up the offer.

        • Ozz says:

          Tariffs are a tax to protect domestic industries. If there are no domestic entites being protected its not protectionism its politics and playing to the rust belt. Most industries are not reshoring but moving to the next low wage country with little environmental regulation. Globalization has ended the idea that a company is associated to a single country. A tariff today is nothing more than a tax on the consumer sold to get people to cheer for it. I hear people cheer for beating up on China while they pay more for things they use. There are better tools to get companies to reshore but its not tariffs.

        • Cas127 says:

          Tariffs on China create incentives to import from other countries and to reshore.

        • Cas127 says:

          “Tariffs are a tax to protect domestic industries.”

          Not if many countries do not face them…China has been using domestic currency manipulation and rather moronic gaps in the WTO rules for over two decades to create astronomical trade deficits favoring China (Yuan depreciation = Chinese exports and invt capital subsidies = Chinese factory subsidies and fewer imports from America).

          Meanwhile, brain dead American political leadership was asleep/dead at the switch even though it had more than enough tools to limit/halt the Chinese currency manipulation.

          Against a background of two horrible decades in US job growth.

          It was simply easier for a craven and incompetent political class to rely wholly on ZIRP (despite huge collateral pathologies) rather than confront the trade issues squarely.

        • Left Coast says:

          Trump’ tariffs ? ? ?
          What about Chinese Tariffs, Japanese Tariffs, German Tariffs and many other countries Tariffs.

          Why was NO ONE upset about them . . . as the USA was being plucked . . . this has gone on for Decades and YOU like our lobbied/bribed Politicians said and did NOTHING!

        • kam says:

          “Free Trade” is a marketing gimmick. There are no 2 countries whose internal rules and conditions, including currency exchange rates, are equal, therefore no 2 countries ever compete on an equal basis.
          China, with the assistance of their partner, the U.S. Chamber of Chinese Commerce, has ZERO pollution control laws, ZERO labor rules, ZERO minimum wage, and has a national objective of increasing the power of the Chinese Communist Party.
          But narrow-minded economic Luddites continue to jaw on about how tariffs on the products made by a dangerous economic Dictatorship are somehow breaking the rules as handed down by God.

      • They already have diversified. If you asked the Chinese where they see themselves in ten years, they might say, we will be the manufacturing/labor brokers for the world supply chain. While the US wants to bomb Iran, China wants to open manufacturing facilities in Tehran. China could have handled the political problems in HK and Taiwan much better if it wasn’t for the mainlands insistence that they be surrogate business partners. The So China sea is an example and Vietnam expands their products and expertise under China’s watchful eye. Call it post colonialism, under the previous system Multinationals exploited labor to the cheapest bidder, local authoritarian leaders who reinforced the culture of poverty (cheap labor).

    • Jdog says:

      The great depression was caused by excessive debt, just like this one.
      Tariffs have been used for centuries to great advantage, just ask China.
      So called free trade is usually good for the non productive, and bad for the working class.

      • Concerned American says:

        Again read my comment. The Great Depression was exacerbated by protectionism.

        • The Colorado Kid says:

          Before the Federal Income Tax most of the revenue came from Tariff’s.
          This Tariff’s are bad bunk is propaganda fostered and perpetuated by the same f*cking Globalist Pigs that have taken this once great nation straight into the shitter. Look, pretty much what is good for them is straight up bad for us. Roughly 70% of our economy is domestic and inflation/weak dollar is simply horrific for the man or woman on the street.

          Yes, I’m still short and have gotten my face ripped off. I will remain short till my 10% is gone or I prevail. I never speculate with more than 10% of my money per the Harry Browne Variable Portfolio Theory.

        • John Taylor says:

          Global trade plunged in the Great Depression for the same reason it plunged in the 2008-2012 financial crisis- because of the popping of a world-wide asset bubble.

          Blaming the Great Depression on the smoot-hawley tariffs to push a free-trade agenda is merely propaganda. It is one data point picked because it coincides with a depressionary collapse.

          We’ve been pushing a free trade agenda in the US since the 1990’s, and it should be apparent by now that it has some serious downsides. For the most part it has been just another way to juice short-term corporate profits by skirting labor and environmental laws, destroying much of our manufacturing belt, and leaving us more vulnerable to supply chain disruptions, and more dependent on China for our basic needs.

          The so-called tariffs we’re getting back are nothing compared to the levels we had in and before the 1980’s.

        • Sporkfed says:

          Prior to the Great Depression, the US was
          the world’s leading exporter. Now, we are
          the world’s leading importer and that comes
          with negative consequences.

        • sierra7 says:

          Concerned American (and others):
          “Smoot-Hawley” tariff act, 1930
          “The Act and tariffs imposed by America’s trading partners in retaliation were major factors of the reduction of American exports and imports by 67% during the Depression.[4] Economists and economic historians have a consensus view that the passage of the Smoot–Hawley Tariff exacerbated the Great Depression.[5]”
          From Wikipedia

        • Cas127 says:


          Simply parroting back economic history, without understanding the *specific* economic dynamics that underlie *different* economic situations in history, is not productive.

          There was no player of China’s size and tactics in the 1930’s…and there are no gold standards in 2020. Those factors make a *lot* of difference.

          Also, tariffs on one or a handful of countries does not insulate domestic bad actors the way that worldwide, comprehensive tariffs do.

          Those are complicating factors that rote recitations do not take into account.

          Rote recitation is a symptom of the theory-borne blind absolutism that I mentioned before.

          Ignoring empirical pathologies by simply invoking half understood theories…has given the US the last 20 years of worsening dysfunction.

        • sunny129 says:

          Tariffs are NOT the tolls of protectionism! They come with different euphemisms! Don’t kid yourself!

          So is currency devaluation,subsidies and tax credits to select industries/sectors of the Economy, Like subsidy for Farmers, Oil & Gas industry, Tobacco, Dairy ETC in the USA!

          We ALL practice the same ‘ protecting our industries’, just with different names!

    • Been to 40 countries says:

      Totally agree with you. The genie is out of the bottle and using each other’s strengths and resources will propel the whole world forward.

      • Puppybreath says:

        Anyone with half a brain know that China manipulated everything in their favor.

        • cas127 says:

          The fact that very, very few people are aware of how Chinese manipulation of their own currency can create massive US trade deficits (by derailing the recycling of Chinese export proceeds into imports from the US) is indicative of what a miserable failure the US political class has been for 20+ years.

          By forcing Chinese exporters to convert their USD to Yuan, the Chinese Gvt…

          a) forces Yuan interest rates down due to greater Yuan supply, supercharging Chinese domestic investment (new factories)

          b) limits imports from US, by removing USDs in Chinese hands, except at an exchange rate set by the Chinese gvt…which manipulated Yuan value further downward (via Chinese printing) in order to supercharge exports and more Chinese domestic invt (even more factories).

          China built its modern factories on the back of US political ignorance/degeneracy.

          Those Chinese gvt policies have created historically unprecedented trade imbalances (in China’s favor) that habitually exceed $400 billion year after year.

          It actually isn’t terribly complicated…but DC is so utterly brain dead that the dynamics have been utterly misunderstood for 20 years (not to sell traitorous corruption short…)

    • Ed C says:

      When China has become the sole source of most of the pharmaceuticals that we need then protectionism becomes a matter of survival.

    • M says:

      The problem with that argument is that China has always engaged in protectionism: it has sought to use ultra-low interest rates given to even its private companies, subsidies (such as providing quasi-slave labor, which cannot talk about forming unions without going to prison and free or nearly free land/factories), discouraging Chinese companies and consumers from using foreign suppliers, massive, industrial espionage, disregard of patents, PLA military hacking of foreign companies/governments to help its companies, etc., to enable companies that it owns or that are based there to drive competitors out of business. Even Germany and other EU countries have also engaged in protectionism and discouraged US exports there.

      Thus, free trade is a beautiful idea, as is pure love, lifelong monogamy, human-powered flight without an airplane, honest politicians, honorable judges, and military intelligence. Sadly, none of these beautiful ideas prove themselves to be realistic.

      Free trade is as practical as communist ideals of giving to each according to his need: which in reality works out to giving everything to the greedy communist cadres (who are the “neediest”) even if the other people starve. Read about Mao’s great leap “forward” and about corruption in China. It is actually worse than the banksters’ corruption here.

      Thus, unless we want to become a subjugated country living in fear of the Chinese communists, we had better impose as many protectionist, mercantilist measures as we can now. We have invested people against this, like those who profit from selling data terminals to China or from allowing Chinese scammers to continue defrauding US pensioners by selling Chinese stock at inflated prices with fictitious financial statements/lies. Those people must be defeated and held liable.

      For example, I love and laugh at the admiration given to the Chinese communists for their building a whole “hospital” in a few weeks. In fact, if you look at the photographs and videos of those massive buildings that a few courageous, Chinese citizens posted, what they built in a hurry was a pre-built, segmented PRISON. It was just used as a hospital, but its design betrays its true purpose: the sudden imprisonment of protesters if there was another Tiennamen-style protest-massacre to hold all of the protestors who survived.

      I, for one, would not like to live in a world dominated by the Chinese communists. I would like to keep my organs where they are.

      • wkevinw says:

        M: correct on the tariffs.
        1. if there is a trade war with China it’s because China started one many years ago. The US is just now responding
        2. quasi-slave labor is correct and US companies who use it are unethical (many of them do this…)
        3. The US has a welfare state. As such, it has some high costs of employment (payroll taxes, govt. unemployment programs). Also it has environmental and similar protections that raise costs of doing business. With these costs, it cannot allow the disorder of totally “free trade”

        This stuff isn’t that hard to understand. Elites of all political stripes know this and keep exploiting. This is the biggest story of the past few decades in the US.

      • Cas127 says:

        Everything is a matter of degree…America can undo a lot of the damage to the last 20 yrs of DC blindness without going 100% autarkic.

        But the degenerate American political class does have to admit there is a massive problem first…and that tends to run against their perpetuation in power.

        That is why the US has been marinating in increasing ruin for the last 2 decades.

        DC valued their jobs far, far above ours.

        • tom10 says:

          I agree with your posts. But please do not pass it off as “DC blindness”. Big D, or Big R, have been anything but blind, in the looting of America.

      • D says:

        Hear here! *claps*

        I worked in the employment industry most of my working life. Watched jobs get off-shored so shareholders and mgmt could clean up, while workers fell further & further behind.

        Now we’re dependent on China for our masks, our drugs, and do much more. When they finally build out a serious blue water navy and can project power as we can, what happens?

        We’ve made so many poor choices in the name of profit for the last 30 years my head spins. And for all his follies and foibles, Trump is truly the only politician fighting for this country. Meanwhile the brainwashed masses believe every anonymous story in the NYTimes and call him a traitor.

        The Fourth Turning is accelerating due to the WuFlu. Good luck yo us all.

    • Stuart says:

      Obviously not. Capitalism still reigns.

    • BoyfromTottenham says:

      I am all for free trade, as long as it is reciprocal. You have to search hard to find reciprocity in trade between the US and China, Russia, the EU and most other trading partners. Try exporting anything to Brazil – they have a 70+% tariff on most imports, plus non-tariff restrictions on top. I know because my business in Australia exports to several countries, and the US is the easiest and fairest to deal with. Protectionism is everywhere, but least of all in the US. Trump just wants the US to get a fair deal. If he has to demonstrate how serious he is about fair trade with China by imposing a bit of tariff reciprocity, then so be it.

      • Nocko2 says:

        Except trump is a paper tiger, especially when it comes to China.

        • Dev says:

          Paper tiger in more ways than China. How about North Korea, Russia, pandemic management…….the lost is long.

        • Happy1 says:

          I’m not a fan of T, but no one can reasonably argue that he is not the toughest with our trading partners of any recent president

      • Lisa_Hooker says:

        “In 1789, Alexander Hamilton, the Secretary of the Treasury, calculated that the United States required $3 million a year for operating expenses as well as enough revenue to repay the estimated $75 million in foreign and domestic debt.Under the rates established by the Tariff of 1789, the government could not meet its obligations.Consequently, Hamilton proposed an increase in the average rate …”

        Yes, you read that correctly – $3 million PER YEAR.

        • wkevinw says:

          For various reasons,the Federal govt was a lot smaller then.

          The more interesting part of the post is about the tariff.

          Tariffs helped build American industrial leadership (a long time ago and for a long time).

          Economists and politicians who say free trade always and everywhere helps everybody and everything are wrong (and they know it). Liberal economists like it because they have lots of (“mathematical”) publications that conclude this, and libertarians like it because it is yet another “freedom”. It keeps the elites in power.

        • Happy1 says:

          Free trade also leads to vastly lower costs and better quality goods. Those of us who are older can remember the bad old days of most goods being manufactured in the US in terms of the costs of those goods.

      • Shiloh1 says:

        @Dev, What’s Trump, or whomever follows him, supposed to do about North Korea or Russia? Please explain it in terms my 20 year old son would understand.

        I’m in my 60s, so I remember the “old duck under the school desk and cover” strategy, civil defense shelters marked with the symbol, with water and crackers. Don’t know if they had any masks, too.

        Most of the enemies the past 40 years are within 50 miles of D.C.

        • Cas127 says:

          “Most of the enemies the past 40 years are within 50 miles of D.C.”

          That is an excellent line.

          And a predictable consequence of the Keynesian State…and Printing Press Government.

    • Robert says:

      You have to deal first w China. tariffs aren’t long term fix but cheaper than war, maybe.

    • Anonymous says:

      I’ve learned that when America was the biggest exporter and had the largest trade surplus of the world at the time of the great depression, those trade tariffs annihilated us.

      Today the biggest exporter and trade surplus of the world is China. Those tariffs will crush them just like it did us back then.

    • Balter says:

      There is truth in what you say – however, it ignores the fact that western populations are being turned into consumers of junk while manufacturing is sent offshore to avoid the high cost of an increasingly uneducated work force and fear-based environmentalism. Oh we have all the information in the world at our fingertips (presuming we own a smartphone with data and can afford the paywall) but we haven’t the skill to do anything with it.

      • Cas127 says:

        “we haven’t the skill to do anything with it.”

        Largely because a desperate, dying MSM is fighting a frantic rear guard action to protect its clients in the kleptocratic inner State.

    • jm says:

      A manipulated exchange rate such as that the Chinese government maintains for the yuan is mathematically and functionally equivalent to a tariff plus an export subsidy of the same percent (at least for an advanced nation such as China). At the end of 2019 the Purchasing Power Parity (PPP) value of the yuan was about 4.2 dollars, while the exchange rate was 7.0 (rounding to one decimal digit). That’s equivalent to 67% tariff on imports, and a 40% subsidy on exports. In earlier years the percentages were even larger — the manipulation is done by the Chinese government essentially promising to pay (at present) 7 yuan for every dollar an exporter brings in, though the dollar is really worth on 4.2 yuan, a form of money printing which leads inevitably to inflation. Back in 2008 PPP was about 3.2 dollars, and the exchange rate 6.8, so the equivalent tariff and subsidy percentages were even greater.
      See for the data.

      • Cas127 says:


        Please post more like this (and in more detail) when you get a chance.

        Even very educated Americans don’t understand how foreign currencies (manipulated by foreign gvts) can badly, badly derail international trade balances.

        Until mega-China, the US’ international trade component was pretty small relative to GDP, so the dynamics of intl trade are pretty unknown to them.

        20 yrs of stagnant (at best) economic performance should have educated us, but DC political guidance is beyond hideous.

    • J.C. Jones says:

      “Tariffs are just another form of protectionism. Didn’t we learn anything from the Great Depression which was exacerbated by protectionism?”

      All tariffs are not bad and protectionism is not necessary if everyone plays by the same rules, which China does not.

      A better question is: “Have we not learned anything since 2000 whebn Congress made the fateful decision to extend ‘permanent normal trade relations’ to China?” Since then we have created a monster: reliance on China to produce our goods, enriching them to build a modern military to take on the U.S. Impoverishing America’s manufacturing middle class workers.

      • Cas127 says:

        The funny thing is that while the mechanics of fx based intl trade abuse are multi-step, they are not really that complicated.

        *And* the G *already had* laws in place to prevent the abuse.

        But the G insanely refused for 20 yrs to admit China was a heavy currency manipulator in the service of building up huge trade imbalances (exploiting its own population as well, in the interests of heavily subsidizing domestic capital accumulation).

        History is going to look back on US leadersh*t during this period and think them simply insane.

    • Carl Stoll says:

      The effect of trade protectionism on the great depression has been greatly exaggerated. I can’t cite any sources offhand, but I suggest you check.

  3. andy says:

    I can almost see beginning of the V right there on the second chart.

  4. MonkeyBusiness says:

    Trading real goods is overrated.

    Real men trade stocks and only stocks. Ok perhaps real estate too ;)

    Full stop.

    Remember that old fable of 10 people living on an island where one of them would collect bananas, and the other 9 would bet on how many their single compatriot would be able to collect on any single day.

    • Thomas Roberts says:

      On that island, someone should be appraising the quality of the bananas, I will take that role. I will also find someone to validate the banana count. But, someone should be in charge of maintaining the banana records. We might need someone in charge of hiring to keep track of these other people.

      Also, real men trade in paper gold and silver, as well. The claims are totally good, I swear. In the event of an imminent economic collapse, just be sure to repatriate your gold claims before everyone else (many fees will apply).

    • sierra7 says:

      Monkey Business (and others)
      “Real men” trade milk bottle caps, marbles, and baseball cards……….”Things” of value!

  5. MCH says:

    Tongue in cheek time again.

    Wolf Warrior #1 (not anything to do with our Wolf, but the current type of diplomat that are on the rise in China):

    “Dear Mr. Richter, we categorically reject the false data from these shipping companies. It is obviously a western centered conspiracy designed to impinge upon the dignity of China. It is not our fault that the metrics around the world is so wrong. We know our data is correct, because, DUH, it is.”

    “We are the only beacon of light in the darkness of despair that has been created by the west during the pandemic. Just consider how effective our measures have been compared to the rest of the world. Less than 100,000 infected, and less than 5,000 dead. You should be taking lessons from us.”

    Wolf Warrior #2: “And no, we’re not trading with the Martians, because Elon Musk wants to go there, we’re trading with the Venutians, they appreciate the climate of our country, and our fine export goods far more.”

  6. Paul says:

    China has a serious problem with fake import and export transactions used to move and launder money, and use one shipment of stuff as collateral for loans from multiple sources, etc.

    Their data has always been dubious.

    • Thomas Roberts says:

      To be fair, it’s a first draft. They will publish new data when Xi reveals they actually grew quite substantially this year, at least 8% and the rest of the world shrank by 25%. In a few years time, there will be the, then final until next time revision, revealing their economy grew by 20% in 2020 or maybe higher. While, the rest of the world shrank by half.

  7. Anthony A. says:

    I wonder if Wolf can get his hands on the number of Chinese workers who are laid off and collecting unemployment benefits from the CCP government. That would tell the rel story! LOL

    • Thomas Roberts says:

      Very few people in China are eligible for any sort of social safety net type benefits, but the estimated unemployment rate was around 21% in may, hard to say if it is better or worse now.

      • Thomas Roberts says:

        If you use reader mode you can usually get around their payroll or downloading their app.

        • Anthony A. says:

          Thanks for the link! Good stuff. It’s a hard life in China, for sure.

        • Thomas Roberts says:

          It is for most, until Xi became ruler, China was becoming richer and more free every year. Since Xi took over, he drastically pulled back on freedom and the economy is shrinking. Since then income inequality has been sharply rising as well. It’s hard to say, what would have happened if someone else has taken over, but, Xi is definitely a very dark path for China.

      • David Hall says:

        China shut down, paused rent payments, handed out free food money to the needy and eliminated COVID pneumonia before reopening everything. I watched it unfold on CGTN.

        Vietnam followed their example.

        • Thomas Roberts says:

          CGTN is a state controlled Beijing based tv station. The CCP claims they do a lot, but, do far less, and what they do desire to do, is greatly hindered by corruption.

          I realize you are probably not being serious, but, you have to be careful, when talking about China, because, Asians might think you are being serious. Especially, because of language barrier. Being too subtle will confuse English as a second language speakers.

  8. John B. Kamerling says:

    baltic dry freight index is up; however, this index appears to be a conundrum

    • MC01 says:

      The Baltic Dry Index lost any meaning many years ago due to massive overcapacity in the iron ore and concentrates carrier sector and capacity bottlenecks in sectors such as granulated sugar carriers.

      Right now the Index is skewed by the unavailability of hundreds of bulk carriers: part of them have been put in storage but most of them are moored off major ports, unable to offload their cargo because, well, the demand is just not there.

  9. Jim K says:

    If Chinese manufacturing is approximately 28% of world production and imports from China have dropped precipitously, is their own consumer market absorbing that extra volume that used to be exported?

    • Javert Chip says:

      Unsure about “internal Chinese market” capacity for absorbing vast amounts of Chinese production. As China gets richer, it undoubtedly consumes more; how much more is the question.

      Using steel as an example, China is rapidly building more steel production capacity (thus appearing to create lots of Chinese jobs). When unsold over-production reaches a pain-point, China will try dumping steel on the world market at highly subsidized prices. This process should play out over the next 2-4 years.

      The world has changed massively for China over the past 20 years, unfortunately, with China losing precious amounts of good will: it’s transformed from a benign, poor country, successfully eliminating poverty for hundreds of millions of it’s citizens to a militarily aggressive power, enslaving 1 million of it’s own Uighur citizens, failing to observe WTO rules, unilaterally abrogating a 50-year treaty over Hong Kong, and using “belt & road” to prey on weaker economies. Not to mention, cyber-stealing technology and sending Covid-19 out into the world.

      • MC01 says:

        For the past 5 years China has been exporting about 100 million metric tons of steel per year. Compared to their (claimed) overall production it doesn’t sound like much but it’s only slightly less than the overall production of India and Japan, who have been jousting among themselves over second place for the past few years, and far more than the entire US production: in spite of all the Private James Frazer impersonators here the US is still the fourth largest steel producer worldwide.
        The chief problem China faces is pretty much everybody around the world incentivates steel production, from European countries trying to keep moribund steel mills from shutting down to Gulf countries throwing money out of the window to appear to have “differentiated” their economies. We are awash in dirt cheap subsidized steel, to the point Lord Co. (an Egyptian company and one of the largest razor blades manufacturers in the world) can afford to exclusively use Japanese steel for their products.

        Regarding China, I keep on repeating my point: instead of wasting time with the usual Liberal propaganda schools should read pupils the works of the late great Simon Leys: it would go a very long way towards correcting many of the present misconceptions, such as how China is a “benign country gone bad”.
        There’s an old saying in France and Italy which originated in the late 60’s when local upper middle class youths became infatuated with China: “Chairman Mao has his head in China and his [redacted] in France/Italy”. Leys (real name Pierre Ryckmans), a highly regarded Belgian Sinologist who maintained good contacts with both Beijing and Taipei, felt compelled to put things right. Leys is still remembered to this day for calling on television one of these wealthy wannabe Maoists “une escroquerie” (a scam) and her writings “une stupidité totale” (self-explanatory).

        • Xabier says:

          The father of a great friend of mine was one of those pathetic 1960’s ‘Maoists’, from Bergamo.

          A total failure, (artist who never sold a painting, architect who never built anything) he liked to blame this on the corrupt Capitalist system.

          Named his son after Lenin – ironically, he became a very wealthy banker…..

      • Escher says:

        China is doing to the steel industry what it has done to other sectors in the past; build out high capacity, flood the world with lower priced product and drive non Chinese manufacturers out of business.
        The solar cell and module industry is an example I have personally witnessed.

        • MCH says:

          More tongue in cheek…. I may be running out of cheek soon.

          Wolf Warrior #1:”we are bringing prosperity and happiness to the world through the hard work of our citizens. We do not need to dominate the steel industry in such underhanded manner, we are competing freely in a market place of ideas and products. Don’t impinge on the dignity of hard working steel workers because your industries are so lax and cannot compete.”

          Wolf warrior #2: “besides, we already dominate steel, who’s #1? We are moving onto better things.”

      • Carl Stoll says:

        A propos your mention of “cyber-stealing technology”, China has been doing that for a very long time. In 1975 I worked at an engineering firm in Switzerland called Bührle Oerlikon, and I was told that China was reverse engineering complex gear-manufacturing machinery made by them.

    • RD Blakeslee says:

      Their are published satellite photos showing the air to be very much cleaner above Chinese industrial centers than it was prior to the Chinese Disease, indicating that their manufacturing is greatly curtailed. Once again, a way turns up to detect their cheating.

  10. Randall Hooker says:

    Did China publish their figures? Can that be backed out the chart recast?

    • Javert Chip says:

      If you do that, it pisses China off, and hardly anybody wants to do that at the moment.

      In the mean time, most governments & businesses know China is lying & cheating, but we’re all pretending not to notice.

      The consequences of “pretending” is starting to have real consequences: Luckin Coffee was registered on US stock exchanges in a manner that allowed it to raise capital without filing audited financial statements. Unfortunately, there are way too many Chinese examples of this behavior.

  11. timbers says:

    We should just make up economic data like China does and like we are starting to try to do on Covid cases. Make our economic figures be want we want them to be. Problem solved.

    • Paulo says:

      They already do. It starts with the Jobs Report, and then continues on. All future adjustments are done in fine fine print.

      I’m agreeing with Concerned American. I’m a Canadian who gets totally pissed every time the US imposes Tariffs to try and protect moribund industries. I am referring to the softwood lumber tariffs and tariff # 2 against aluminum.

      What do I and friends do to express our displeasure? We buy from any other source than American companies. Sometimes I actually have to do an internet search on the company and product to do so. We also have vowed in our extended family to never return to the States for any reason, whatsoever. I have friends that used to travel extensively (before Covid) and they arranged all flights with no US layovers for the last 3 years. Is this a big deal? Not for just us, but multiplied by people all over the World and it further adds to falling US exports.

      The only Cdn products US wants to buy at our prices are pharmaceuticals, and we aren’t selling.

      If you want friends, allies, and supporters, you have to offer the same. Like begats like.

      I’m going to miss those Oregon beaches and friendly Oregonians, though. Oh well.


      • MiTurn says:


        It is telling that you’re going to miss Oregon beaches. I find them cold and mostly cloud-covered (I grew up in Oregon). If they’re an improvement to BC, you need to try further south!


        • Seneca’s Cliff says:

          The normally gloomy weather on the Oregon Coast only makes the nice days that much more special. I still remember my senior skip day (high school, 1979) like it was yesterday. A weekday in may, no one but our 50 closest friends as far as the eye could see, perfect sand, huge blue waves, bright sun and a cool breeze. No one can convince me that at that moment it was not the best place in the world.

        • R Hughes says:

          Agree, esp with Seneca below. Warm sunny days with minimal people are fantastic. In many places you can drive on the beach, park a few feet away from where you spend the day.

      • Javert Chip says:


        You forgot to discuss the ridiculous tariffs Canada imposes on American dairy products.

        • OSP says:

          Funny that, eh JC?

        • timbers says:

          Why do you assume he forgot? He just didn’t. That’s not the same thing now, isn’t it?

        • td says:

          Even with those tariffs, the US had a $400 million surplus in dairy before the Covid-19 crisis. Canada does supply management in dairy to keep the dairy farmers in business. The US massively subsidies dairy, feed crops and what have you and thus has a huge oversupply. Which drives prices down to where US dairy farmers are steadily going out of business, anyway.

          That oversupply would be immediately dumped on any other country silly enough to try to have free trade in dairy with the US.

    • roddy6667 says:

      The unemployment statistics published by the US government are completely unbelievable. So are the inflation numbers sand the way they are arrived at. There is no beacon of truth in America.

  12. Brant Lee says:

    If there were ever a crucial time for the dollar to hold its value, this is it. It’s the only thing standing between the survival and disaster of the U.S. Congress must darn well support unemployment payments and stimulus or else the dominoes will fall too quickly for everyone else, too.

    Lord, may we print.

    • Wolfbay says:

      So printing and borrowing more and more strengthen the dollar? Our currency is going to go through the roof.

  13. Been to 40+ countries says:

    From the China chart, their exports did not increase since 2018. It just did not go down further.

    You stated that the shipping data do not agree with China’s fake data but you have no shipping data to prove it. It is very easy to call China lying without providing any facts. After all, the West is very good at double standards due to jealousy.

    China provided medical supplies for the world during the pandemic. Many manufacturers restructured so they could/can fill the orders. The data do not surprise me at all.

  14. Curious says:

    It may be less of a deep fake from China than their SOP on steroids. In 2003, when SARS was disclosed and had crossed borders, the WHO enlisted the support of public health services from the US, UK, Germany, France, and other nations. More than 60 teams of medical experts came to assist in SARS-affected areas. They included 84 personnel from the U.S. CDC, and ultimately, more than 800 CDC employees were involved in the response to SARS.

    This time, despite numerous requests by our CDC to send experts, beginning in early January, they rebuffed all offers to send CDC experts, and soon after expelled all journalists from the WSJ, WP, and NYT under some pretext. I don’t recall reading any complaints about those things from either the European press or the WHO.

    So after 17 years of trade between the US and China, any assumption that we’d be working together on this pandemic for the benefit of mankind, seems to be mistaken.

    • timbers says:

      Considering official U.S. policy starting with the previous Adminstration if not earlier, has been to isolate China economically, and regimen change her government…a policy not pursued by Europeans…why are chastising China for acting as she did? It’s the U.S. you ought to point fingers at, not China.

      • Ed C says:

        Fake news. No one has ever suggested regime change in China.

        • timbers says:

          TPP is fake news? NGO’s in HK too? You’d best get better sources than your fake news outlets. Also, I forgot to mention our spit in her face, provocative military intrusions.

        • timbers says:

          BTw, the CIA doesn’t suggest. It regime changes. Like how many governments since 1950 or so…us it 70 or 80? And yes, China is most definitely on its list. But there is disagreement in the ranks who should be regime change first because we can’t do both at once: China or Russia?

        • Ed says:

          TPP was about “regime change”?

          TPP was countering the weight of Chinese trade in those Asian nations, which is forcing policy changes even in Australia and Japan, our closest allies there.

          TPP was not about toppling China. It was about trying to keep up.

          You vastly overestimate the ambitions of the U.S. in China. The U.S. ambition in China is mainly to make money. That’s even true of President Trump, who is mainly faking his effort. If he was serious, he would enlist help from Europe, who has the same interests.

        • Happy1 says:

          Manufacturing will move on from China to other lower cost locations. This is already happening. China has a decade at most before a host of other countries will be taking its place on the low cost manufacturing end.

      • MCH says:

        For China and the US, there has to be a king of the hill, it’s just the natural order of things. The US is it for now, and they are interested in making sure they stay there, that means kicking the guy coming up the ladder. The Chinese wants to be there, and will do whatever it takes to knock the US off. So, all this back and forth, it’s just natural. The biggest mistake the US made was thinking that the world would be static with it at the top… FOREVER. It was dumb.

        As for the Europeans, there is one certainty for them. They will never be on top. They know this, and so does everyone else. The only thing they can do is play spoiler, meaning, the European politicians will do whatever they think is in their best interest and screw over their allies in the process without thought. The problem is most of the time these European leaders don’t have a clue what’s in their best interest. They know inherently they don’t belong on the top, but they don’t want anyone else there either.

        If anyone wants proof, just look at the entirety of their history, the litany of idiotic decisions for the greater good that ended up basically with one or two major conflict every century.

        By the way, before anyone call me a Europhobe, my point is aimed at the politicians (the idiots that are in charge), the European people just get to suffer for their decisions.

      • Javert Chip says:

        Fake news: US sponsored China for WTO membership

        • timbers says:

          TPP was puhsed to upend WTO. Have you not read the news in last 20 years?

          And besides, regime changing China does not = We Don’t want their Slave Labor Cheap Products in Walmart via WTO. It means we want to control their government.

          And the fact we pushed TPP and U.S. NGO sponsdored regime change in HK contirms exactly what I wrote.

          If you want me to enlighten you with realilty based news souces, I’d be happy to share them with. It

        • Ed says:

          Timbers, if that was true of TPP, how do you explain that the main “opponent” of China in the U.S. killed that treaty?

        • Javert Chip says:


          TPP was killed in the cradle (Hillary supported it as Secretary of State; rejected as a 2016 Presidential candidate).

          Don’t know where your “regime change “comment comes from. No one’s proposing to “control China”, we were hoping to peacefully coexist.

          I appreciate your offer to enlighten me (I frequently need that), but with all due respect, I have no interest in reading 5-6 year-old Obama-era political screeds regarding a trade pact that was never going to happen.

      • Javert Chip says:


        Do you have a credible cite for your claim of “official U.S. policy starting with the previous Adminstration if not earlier, has been isolate China economically, and regimen change her government…”?

        You’re claiming this is official US policy, not just some goof-ball deep-stater having Neo-con hallucinations.

  15. Insta says:

    Estimated delivery time on appliances seems to be 6-8 weeks now. Ordered a Bosch dishwasher June 8, delivery is tentatively mid-late July.
    Ordered a kitchen table today, delivery is tentatively mid-August. It seems to me that manufacturing may be cut back to only specific order based.?, but I don’t buy often enough to know what delivery times would be in normal economy. Also father-in-law ordered freezer in late April, still no idea when it will be delivered.

    • andy says:

      Try BestBuy, delivery in like 3 days or sooner. Parents just bought samsung fridge, dishwasher, stove. Already installed.

      • Insta says:

        Andy, appreciate the thought but Best Buy does not sell the one my wife wanted, and most of the Bosch 42 db or quiter ones on their website say “more coming soon” or “sold out.” A very few say July 31st. She has been waiting years for a dishwasher upgrade.

    • El Katz says:

      Depends on where you order it from….. our local supplier has them on the floor (Bosch) in stock. Delivery within 24 hours.

      Dining room table? Depends on whether it is bespoke or mass produced. Mass produced is usually available within seconds (see Pottery Barn or RH).

      Freezers are unavailable because of Covid. They were sold out almost immediately for those who had the foresight to stockpile frozen food (aka meat). Hope they have a generator to save said food in the event power is interrupted. I just converted my generator to tri-fuel (natural gas, propane, gasoline) to make sure we didn’t lose our perishable items.

      • California Bob says:

        “I just converted my generator to tri-fuel (natural gas, propane, gasoline) to make sure we didn’t lose our perishable items.”

        Double-check your transfer switch (or are you going to run all your appliances with extension cords?). Many test-run their generator at least once/month, but don’t check the transfer switch operation and get a nasty surprise when the generator is required.

        • RD Blakeslee says:

          I use a diesel emergency generator with bulk storage of diesel fuel, which is less volatile and lasts better than gasoline. Also fuels my pickup truck.

          Switchover is done manually: Flip the powerline entry breaker off and connect downstream of it to the service entry box with a cable matching the capacity of my generator.

      • Zantetsu says:

        I stockpiled nothing and have been just fine.

    • Anthony A. says:

      My next door neighbor ordered a refrigerator from Lowes about a month ago. It came yesterday. And it wasn’t exactly what she wanted, but the others were with a longer (estimated) delivery time.

      • R Hughes says:

        Looking to buy a hot tub, USA made, 5 to 8 weeks for delivery, factory producing as orders come in. Viking, husquavara sewing machine assembled in Tenn parts from world wide, backlog 4 to 10 weeks, building as they get orders and parts.

        Lowes, HD, Harbor Freight, lots of holes in inventory, esp in important stuff like electrical parts. Seems like new normal, got to plan ahead alot.

  16. Alan Harvey says:

    It means workers in the export industries who are often the highest paid, are out of a job. Wages are falling for those with some of the most robust consumer demand. Combined with the shutdown in hospitality and retail and the heightened uncertainty (hesitance to spend or invest), the crunch on demand could mean another debt bubble pops.

    Trump is just blundering through incoherently. The Dems need to get their economics down now, like Obama did. (But not make the same mistakes. Bailing out big banking and big business bought us ten years and we’re back in the soup.)

    Everyone learned something from the GFC, but is it enough, or the right thing?

  17. former says:

    Wolf, please forgive me for Off Topic question (related to your article of FED balance sheet shrinking)

    I will try to automate with script data gathering from:

    Today, numbers are different, than were, when you wrote about it, so I can’t find the numbers.

    Can you tell me, which number you are tracking for this purpose. There are several tables, in which one it is and what is it’s exact name? There are several that are now around 7T and I’m not sure which is the correct one.

    Also, if I may be so blunt, if you are tracking more than one number from upper site, can you tell me which ones, so I can try to get them all :)

    Oh and congratulation on your short trade. Looks like you are going to nail it again!

    • Wolf Richter says:


      All items come from Table 1 except:

      Total assets: Table 5 bottom
      CMBS: Table 3, memo
      Swaps by Country from the NY Fed’s website linked in the text (download the data in spreadsheet format)

      Note the the 13(3) facilities constantly change … the Fed adds more all the time, now there are 10 already. So if you automate this, you’re going to miss the new ones.

  18. former says:

    OT continue: Sorry forgot to add this part, my guess is, “Total Assets” from table 5 or table 6. This week both numbers are the same.

  19. twFool says:

    One data point. Taiwan released April trade data, we still have double digit growth in export/import with China, and everywhere else import/export plunged. So, China’s data might not be too fake.

    Our government is trying very hard to pivot away from China for the last few years, but we are more dependent on China than ever.

    • Wolf Richter says:

      US imports from China are down 24% for the first four months of 2020. The US is by far the largest target country of Chinese merchandise.

  20. Robert says:

    It’s my general impression nothing really recovered since 2016 or even 2009. A look at many of the shipping stocks shows a high around 2016, then the bottom falls out. ( EURN, STNG and TEK as a representative lot)

    Is everything we hear on most financial news sites (present company excluded), just fake news to get us to buy overpriced stocks?

    My guess is China will collapse in the next year, if they’re so desperate to falsify the data to such an extent. I wonder if Bloomberg will ever report on this topic? I wonder when it became PC not to criticize a totalitarian dictatorship?

    Good reporting here.

    • If China really did “collapse” next year the whole world will follow. I think we’re going to find out China isn’t the only faking data..

    • MonkeyBusiness says:

      Many American economists have been calling for a China collapse since 2002. I used to agree with them, but that’s before the virus, and before the demonstrations. This country is just a tinderbox waiting to explode. Someone somewhere is going to do something stupid, guaranteed.

      My current base case now calls for the US to collapse BEFORE China. That’s going to be the real Black Swan. I can’t believe I actually just typed all of that.

      • roddy6667 says:

        I have been living in China for over 7 years. Your beliefs are delusional. There is no tinderbox. Life has returned to normal. The kids are back in school, people are back to work, everything is open. The people are quite proud of the leaders and the choices they make for the country. A quick 5 minute session of reading foreign newspapers online show what a fiasco American and European governments have foisted on their people.

        • MonkeyBusiness says:

          Sorry, I wasn’t writing very clearly. It’s America that’s the tinderbox waiting to explode.

          East Asia will not escape the coming depression lightly, but they’ll muddle through, whereas the Western world is looking at a reckoning.

        • Javert Chip says:


          You forgot to express pride in the 1 million Uighurs in slave labor camps….

        • MonkeyBusiness says:

          @Javert Chip, I heard it’s much nicer than Guantanamo. Also you must have never heard about the Prison Industrial Complex in America.

          Why don’t you Google and learn a bit about it?

        • Lance Manly says:

          Javert is correct on the Xinjiang re-education camps i.e. slave labor. I would link the wikipedia article but that would just make more work for Wolf

        • VintageVNvet says:

          I understood your ”this country” was referring to good ‘ol USA,,, and I agree with your characterization 100%.
          With the current level of invective, malarky, and downright crudities coming from both sides of all the aisles all over, We The PeedONs are in serious trouble, by far the worst situation in my 75 years, including the protesting in ’68, albeit may have been worse elsewhere that year, and for all we know due to current censorship worse elsewhere now too…
          IMHO, one or the other ”party” or maybe better if not them due to their incestuous relations, then an independent entity needs to put together a real ”executive” group and run for election for POTUS.
          That group, in my thinking, would consist of a balance of proven leaders of states, as well as other experienced actual leaders; and, most importantly, be a group of experienced folks who have shown some ”guts”,,, ”cahones” whatever,,,
          NOT just more of the same senile old folks trying to scam their way to more opportunities for corruptly profiting from their position.
          Otherwise, just more of the same as USA continues to be flushed down the drain, as now.

        • VeryAmused says:

          Things are going so well in China that they are banking on millions of street vendors to save the dream.

    • Jason Daily says:

      I agree with roddy6667. I’ve been here for nearly 20 years. Things appear pretty much back to normal in terms of people shopping and eating out.

      They are happy with how the government handled COVID. They are confident the government can play whack-a-mole with any new cases.

      The new law allowing people to sell things on the roadsides like before has resumed. The government will clearly focus on keeping people employed.

      Of course, we do not know how a drop in manufacturing and exports will change things when the West runs out of money to buy stuff that is made here.

      • VeryAmused says:

        So China is banking on a nation wide flee market to save the dream?

        Good luck with that.

        • roddy6667 says:

          Nobody ever made that claim. The street vendors are the last to return, which shows a return to normalcy. I look out my window and see all the vendors and their customers up and down the street and I know that everyday life has returned. The only sick people in the entire province are two people who were quarantined when they got off the plane. It is very safe here now. China will finish the year with a positive GDP growth rate and single digit COVID-19 cases.

        • VeryAmused says:

          According to the possibly fake news it sounds exactly like the claim they are making.

          But I have no doubt that as the world economy melts it is nothing but blue skies and rainbows in China.

    • Happy1 says:

      There is plenty of commentary in the mainstream press about China’s phony numbers, the just kicked out lead reporters from WSJ and NYT for this purpose.

  21. MiTurn says:

    “in violation of the dictum printed on every WOLF STREET beer mug”

    Fine, but I still want one.

  22. CCC says:

    The scariest headline for the stock market Monday morning will be Coke stopping all ad spending on social media. It should be a really interesting day.

    • Lisa_Hooker says:

      Coke and I believe Unilever. It’s possible that major corporations have become aware that almost everyone has become immune to web advertising. Call it “slotted” vision. We automatically do not focus on HTML advertising.

      • Cas127 says:

        In general, most companies cut a lot of advertising during downturns…and always have (because of ultra quick benefit to bottom line via cost savings).

        But this go round, a lotta woke poseurs inside-the-wire like to wrap their self-interest in “social justice” sanctimony.

        Won’t be buying any Unilever products for a long, long time.

    • Yancey Ward says:

      I have never gotten the why of social media ad spending, but maybe I am just an odd person. The only ad spending online that makes sense to me is the spending on search priorty on Google and the other search engines- it is the only advertising that I even notice without active anger at having it thrown in my face, and even there most of the time I am not looking to buy based on a search.

      • Cas127 says:

        Most advertising seems massively pointless, with rotten, rotten ROI’s (at least if publishers’/broadcasters’ published CPM rates are anywhere near true).

        If the Internet is bad (with measurable metrics), imagine what a fraudulent farce TV advertising is (but hey, the brands’ ad buyers get to bang starlets and that’s what really matters…).

        I’ve often wondered (given the rotten TV ad ROI’s in reality) if TV advertising really isn’t a back channel payoff to political interests, merely routed through the oligopoly of media companies (who take a healthy skim).

        After all, advertising economically supports the entire *broadcast* TV ecosystem, which is necessary for the (literally) DC approved MSM news sphincters to lay their eggs in America’s collective head.

        • Happy1 says:

          Seems unlikely there would be so much ad spending if the ROI doesn’t pan out, just saying…

    • Anonymous Coward says:

      Add Starbucks to the list. My interpretation is these companies are using the current climate to virtue signal but they were already planning to reduce online ad spending in a less visible way regardless.

  23. polecat says:

    Prepare for downward economic progression in 3 .. 2 .. 1 ….. Drop!

  24. Petunia says:

    China is experiencing major flooding as we speak, somewhere near a large dam. After watching this on video I don’t think of China as such a powerhouse. I expect this will hurt their manufacturing and exports in the immediate future.

    • Lance Manly says:

      The three gorges dam clearly shows deformation in satellite photos. How bad things are on the ground it is hard to say. Xi has recently talked about returning the area to “natural conditions” so there is something going on.

      • Lisa_Hooker says:

        Its would take a heck of a lot of coal fired power plants to replace the Three Gorges facility.

      • Yancey Ward says:

        It is easy to fake such images, but when you add in the claim that the blocks are independent and not attached to the bedrock (claims that I can’t find any disagreement with), then it becomes harder to deny the deformation.

      • taxpayer says:

        “The three gorges dam clearly shows deformation in satellite photos.”
        “Xi has recently talked about returning the area to ‘natural conditions'”
        Asia Times, South China Morning Post, and even AP carry reports of flooding, but I can’t find anything about deformation of 3GD.

        • Lance Manly says:

          I can’t put a url but google
          “washingtonianpost” three gorges dam
          To get it. The quote from Xi was:

          “On April 24 – 25, 2018, Xi inspected the Three Gorges Dam and the surrounding cities and towns. While presiding over a forum on ecological restoration in the area, he stated, “We must make it a priority to restore the Yangtze River’s ecological system” and that “destructive development must be forbidden.”

          This is also the first time a Chinese top leader has visited the Three Gorges Dam since 1997 when Jiang Zemin and Li Peng attended the damming ceremony.

          Xi’s speech implies that the top leadership regards the Three Gorges Dam as a “destructive development” project.”

  25. Augusto says:

    China’s economic data has been clearly faked for a long time. However, because this narrative was considered positive from a financial perspective it was accepted and repeated by the financial sector-its media, investment firms, Wall Street and their political mouth pieces. They made money out of the lie of eternal China growth and opportunity. They of course ignored stories about China’s theft of intellectual property, stealing foreign jobs, suppression of minorities, persecution of various religious groups, and international corruption. This is our failure, “they” are us”. Its a deal with the devil, and it will end badly.

    • otishertz says:

      More than an entire generation was only allowed to have one child per familly.

    • Lisa_Hooker says:

      With a few minor edits:

      America’s economic data has been clearly faked for a long time. However, because this narrative was considered positive from a financial perspective it was accepted and repeated by the financial sector-its media, investment firms, Wall Street and their political mouth pieces. They made money out of the lie of eternal American growth and opportunity. They of course ignored stories about America’s theft of intellectual property, exporting jobs, suppression of minorities, persecution of various political groups, and international corruption.

      • Augusto says:

        The idea that the US is the same as China is absurd. I am not an American, have travelled and worked throughout the world, including China and the US. America has its problems, but China is an authoritarian state, where no one owns anything, including their own life.

        • Lisa_Hooker says:

          Not saying they are equivalent, just that they are similarly crooked. I thought your selective analysis wasn’t bad at all.

        • Happy1 says:

          Similarly crooked? You can’t utter a word of criticism about the government in any internet forum in China. To equate the two countries in terms of corruption is the most ludicrous thing I’ve ever heard, and I have spent time in both countries.

    • Michael Droy says:

      Which would make China the size of Singapore now then.

      Or do you actually mean you have believed it has been fake for a very long time, and for once this century you might actually be right?

      • Augusto says:

        Fake doesn’t necessarily mean low, its just means made up. As to belief, read the article above and the facts. And guess what, the lies didn’t just start this year.

  26. Jake Simmons says:

    A friend of mine that scolded me in May for saying that the economy was collapsing as far back as the Summer (Repos falling off the “wall”) of last year, the virus-boogeyman is only cover for that fact, and the economy isn’t “coming” back is starting to change his tune. While speaking with me the other day, he looked like a deer caught in headlights; Except, a deer can perceive what’s about to mow him over.

  27. Macro Investor says:

    None of this should surprise anyone. Remember when they got caught building vacant cities?

    It’s disgusting that we even trade with a human rights abusing dictatorship. Shame on american business and gov’t for profiting from their virtual slavery, then ignoring all the abuses over the years. I hope after the election we have the courage to correct this. Full embargo and exclusion from international banking until the people are free.

    • Whatsthepoint says:

      Which people did you mean? Oh, the Chinese? Try door #2.

    • Michael Droy says:

      Funny how those that buy every word of the fake anti-china propaganda, then accuse China of fake news.

      Consider the 1 million Ujghurs that are supposed to be imprisoned. Explain why only one of the 300-400 implied prisons has been identified by satellite. Meanwhile other propagandists can tell you how many cars there are in any given Chinese hospital car park.

      • Augusto says:

        Its not just the Uyghurs, but the Tibetans, Christians, pro-democracy and human rights advocates, or just plain anyone who questions or displeases the regime who disappear into the night or end up in concentration camps (re-education camps in the Chinese Communist vernacular). You sound like some CCP plant or dupe.

        • Jason Daily says:

          These comments are supposed to be about the economy in China. This has devolved into China-bashing and is not helpful.

          For someone who has been here for a couple of decades, I have seen first hand. People have indeed been lifted out of poverty. I know Christians, none of whom knows anyone who has ever even been harassed, let alone imprisoned. This is a very free country. The police do not stop you walking down the street. US has 2,121,600 prisoners, the highest per capita on Earth. They are kept for low-level drug offences as slave labour suffering terrible conditions. Satellite photos of US prisons exist too, right?

          For all its faults, China has served its people very well. Compare the US in terms of social justice, infrastructure spending, surveillance, etc.

          I know many of these comments are coming from USA, which has been innundated with anti-China media of late. Please, let’s not go in for that Cold War mentality.

          Let’s get back to the regular, high-quality comments this site is known for.

      • Phil says:

        There’s lots of footage of multiple detention centers. Do a Google search for “What’s been happening in China’s Xinjiang, home to 11 million Uyghurs?” Lots of footage in the video there.

        • Happy1 says:

          @Jason Daily,

          There is no freedom of religion China! Millions of Muslim Uighers have been detained and harrased. You see no criticism of government because people who do so are jailed. China illegally extradites people from HK that they find troublesome. Yes, hundreds of millions in China are better off now than 30 years ago, thanks to the government belatedly allowing private enterprise. What of 100 million deaths from the great leap forward? The millions of lives ruined by the cultural revolution? Why does every wealthy Chinese person do everything they can to have their children acquire citizenship in the US, UK, or AU? Your post is pure propaganda.

      • Javert Chip says:

        Michael Droy

        Since you asked…

        Attached Wikipedia link specifically addresses Uighur camp existence & location. Note several appear to be repurposed Chinese government facilities (“Camp Facilities” is the heading in the article).

        Also note first couple lines of text states “These camps are guarded by armed forces or special police and equipped with prison-like gates, surrounding walls, security fences, surveillance systems, watchtowers, guard rooms and facilities for armed police etc”.

        • Happy1 says:

          Yes, this is well reported by WSJ and others, what next, North Korea is a workers paradise?

  28. Nicko2 says:

    What a bunch of doomers. Have more faith in human progress. Emerging economies will continue growing ~5% a year, China and India, and most of Asia will also continue growing. The US is about to undergo a radical political realignment in four months. There will be a vaccine within a year. The restoration is coming.

    • GotCollateral says:

      For someone who has been living in an “emerging economy” for half a decade, and would readily admit their are some benefits compared to living stateside esp where costs are concerned, I believe you’ve had one too many licks of bill gates taints lately and might wanna ease up and leave some juice for the rest of us, esp if you think the malfeasance that has been baked into the cake as far as the global growth story goes only applies to a few countries.

    • polecat says:

      Can I have some of whatever that Acid is that you’re taking ..

      A vaccine ?? .. that’s efficacious, without serious side-effects? and, if we assume it provides some quasi-lasting protection .. is free to all, as was the case with polio vaccine, and not just a moneyblood-funnel over Big Pharma’$ black-hearted maw?

      A radical political realignment, to what end?? .. moar disfunctional hell for the lowly mokes, brought to you, me, your’s, and mine .. from the very same grifters and hangers-on, on both sides of the legacy-party coin?

      A ‘restoration’ … back to the insular ‘pre covid’ status-quo .. ????

      Ok, pull the other one !

  29. Michael Droy says:

    People have been claiming that China has lied about it’s economic numbers for decades. If they were right, China would be about the size of Singapore right now.

    The claim gets a bit embarrassing after a decade or so.

    • Just Some Random Guy says:

      The Chinese govt could tell me the sun rises in the east and sets in the west and I’d have to confirm that with another source.

    • Wolf Richter says:

      Michael Droy,

      It’s the other way around. It gets embarrassing putting out fake economic data for a decade or two.

      And your Singapore comparison is just stupid. Or was that supposed to be a joke and misread it?

    • Happy1 says:

      China has been lying for decades about growth. The government is completely untrustworthy and jails those who speak out. Why are you acting as their shill?

  30. Petunia says:

    The new silk road train is probably contributing to keeping Chinese exports up. Trains full of containers don’t all ultimately land up in Europe. Some are bound to land up in Russia as the ultimate destination.

    In fact, I saw a video taken about Xmas time, an American with a Russian wife, visiting a home improvement store in Moscow. It was just as large as any similar store in America, had tons of stuff which looked like it all came from China. The store was packed with appliances, lighting, and all the things you would expect to find in a home depot. I thought their stuff was actually nicer than what I see in my local stores.

    • R Hughes says:

      HD, Lowes today have become pathetic shells of what a true hardware, home improvement store used to be. Summer home in Eugene, Or where local home improvement store is Jerry’s, fully stocked, veteran career employees with knowledge who are willing and able to help. All employees can do, will do attitude. Compared to the big boxes here in Cochella valley it is like nite and day.

      • Somebody needs to develop an APP to help consumers find what they need in these places. The inventory system by intended use creates double stocking of items. If you ever wanted to step down PVC to tubing. Usually the employees know where the pipe thread to hose thread adapters are located, under their system they should be in two places.

        • El Katz says:

          If you go on HD’s site, choose the store you’re in, then search for the item. When you click on the item, the aisle and bay number is listed. It also tells you what the current inventory is at that store.

        • California Bob says:

          re: “It also tells you what the current inventory is at that store.”

          Not necessarily. I needed a bunch of aerosol paint and primer to paint a new iron gate to secure our ranch property; HD’s website indicated they had numerous cans–I needed a half-dozen of each–but when I got there not long after checking the website the shelves were picked clean except for a few oddball colors. When I asked the ‘sales associate’ why, he said “they only update the website once a day” which, if true, is nonsensical in this day and age. While staring at the empty shelves, several customers came and bought most of the remaining stock; for some reason spray paint is a hot item during the ‘lockdown.’

        • Javert Chip says:

          Ambrose Bierce

          Strangely enough , there is such an app; coincidently, it’s called…wait for it…”The Home Depot App”.

          Besides price & availability, it gives you the row & bin number. App assumes you can read.

    • Phoenix_Ikki says:

      China, the master of fake demand. Just like all those ghost mega cities everywhere. Create artificial demand to create an illusion that the world and market is dumb enough to buy the never ending growth story.

      Maybe the market has been listening to Fleetwood Mac’s Little lies a little too long.

      Tell me lies
      Tell me sweet little lies
      (Tell me lies, tell me, tell me lies)
      Oh, no, no you can’t disguise
      (You can’t disguise, no you can’t disguise)
      Tell me lies
      Tell me sweet little lies

    • Wolf Richter says:

      The problem is that IMPORTS are down in other countries. It doesn’t matter how the goods get there – ship, train, air. If their imports of Chinese goods are down, China’s exports would have to be down. One country’s imports is another country’s exports.

    • Happy1 says:

      Have you ever been to Russia? The standard of living there is a fraction of that in the US witythe exception of a wealthy urban elite in Moscow and St Petersburg. Your sample of 1 is completely unrepresentative of life in Russia in 2020

  31. Phoenix_Ikki says:

    You know the saying..the market can still irrational longer than you can stay solvent. This seems to fit the theme lately to my dismay. Highest PE ratio ever but I get the feeling market will brush it off after Q2 earnings especially if some of them hint at any positive projection for future quarters.

    P/E of 23 but if you look at Tesla you can see just how long unrealistic P/E can last.

  32. DR DOOM says:

    New Century, New World. The Admiral Perry moment has expired with the arrival of China and not Japan. The irony of it is that that Britian and the US forced perpetually xenophobic China into our fiat nightmare. We are shoving Russia her way To boot. Now that China has arrived with her lying communist government the West will have to learn that the West’s lying and deception is different than the East’s lying and deception. The West and its great hope ,America, had better get busy and start behaving like the America that created Baseball. We need more trade to come home for our security. C19 should have demonstrated this. We need more opportunity to make a decent living for people in the US. The collapse of World Trade is a blessing if we get busy and play our game. Blaming others will start a shooting war because the Federal Reserve ,Congress and Wall Street’s narrow interests are served with war much more than their interest of fixing Main Street. Some things need to come from China. Our pollution laws and lack of infrastructure will dictate that. Other things need to come back such as a large part of our pharma. If our government and the “Captains” of industry cannot direct this then China and her ” lies ” will win the day.

    • MonkeyBusiness says:

      Won’t happen. Our billionaires as well as the investor class will need to take a paycut. Good luck to that.

      Also even if factories were to return, most of them will be equipped with robots.

      The real solution is a return to a small scale economy i.e. producing things locally for local people. Large scale anything will then be unnecessary, but then people will also have to forgo a lot of things that are currently possible.

      People being people however, they will want to have their cake and eat it too. So yeah, not going to happen.

      • RD Blakeslee says:

        “but then people will also have to forgo a lot of things that are currently possible.”

        But consider what will be possible that is increasingly impossible in today’s macro-economy.

    • LifeSupportSystem4aVote says:

      “The West and its great hope ,America, had better get busy and start behaving like the America that created Baseball.”

      America is already behaving like the America that created baseball, only exponentially leveraged up from that time:

    • Nicko2 says:

      Most offshoring will never return. Nor should it. Robots/automation/AI will continue growing. The important thing is the US returns to it’s natural leadership position in the world and strengthen democracies. Isolationism solves nothing. One thing we can be assured of, the incoming Biden administration will not turn it’s back on it’s allies like the Trump admin has…

      • Cas127 says:

        Allies live up to their promises…something that Turkey and Germany have repeatedly failed to do in the last 20 years.

        Why have faith is future promises when past ones have been repeatedly and long broken?

        They don’t view us as allies…they view us as patsies.

      • No Expert says:

        ‘Strengthen democracies’ ? Thats the opposite of what the US does

        • MonkeyBusiness says:

          US people are the most delusional people on earth. “Natural leadership” What the hell is that?

          And speaking of leadership, we are leading the world in terms of Coronavirus cases. So much winning.

      • Happy1 says:

        The US would do well to look after itself and take care of the problems within our borders rather than defending people in Europe who don’t like us or invading countries in the Middle East who would like to kill us.

  33. Just Some Random Guy says:

    I’m tired of the “tariffs are bad” armchair economist talk. Yeah in a perfect world no country would have any tariffs and we’d live in an Adam Smith utopia. But we live in a world where virtually very other country BUT the US has tariffs. And lots of them. And unless we want to destroy every single industry we have (and we don’t have much left) we better start implementing some as well.

  34. Yes but, US oil exports to China ramped up in March and even higher in April! We might be able to discern if this was really demand, or stockpiling. Any way of peeking inside China’s oil reserves?

  35. RD Blakeslee says:

    It was just now reported on Reuters that the fed announced this morning (Sunday) that it has purchased bonds issued by major corporations, including a utility subsidiary of billionaire Warren Buffett’s Berkshire Hathaway holding company.

    By contrast, which implicitly reveals the Feds lack of concern for all but its big-time crybaby cronies:

    The Feds’ Main Street Lending Program, only recently opened its doors and has yet to make a loan even though the crisis is seen as hitting small and medium sized companies the hardest.

  36. anony says:

    Most of China’s economy data lacks integrity, the country’s Statistics agencies are heavily influenced by its government.

  37. MCH says:

    My tongue has been planted so firmly in my cheek that it is about to burst through like the chestbuster in alien…. but nevertheless I will persist. Because that’s what a good Wolf Warrior does.

    Wolf Warrior #1: “Dear Mr. Richter, you are beginning to see the light, there is good data, and bad data. The BLS from the United States for example is totally unreliable bad data, we are glad that you’ve pointed this out. We do believe that as you examine more of the data that you are collecting, you will find that most of these data sets you’ve cited are western propaganda designed to harm China. BAD DATA.

    As we said before. There are very reliable sources you should trust, Global Times, CCTV, the People’s Daily are all reliable. Even SCMP has started to come around, although they still retain a sizeable bourgeoisie element to them, but they are getting better. It is our hope that you will see the truth. The only good data is what comes from official sources. And not western governments with their paid mercenary corporations, and their radical ideas.”

    Wolf Warrior #2: “Yeah, that’s right, trust us. The Venusians do, and they are always happy. In fact, if you do the right things, like Stan’s dad did with Pooh, we’ll be happy to support you with money.”

  38. james riolo says:

    We are all in love with the ‘GOD ‘ of cheap! And unfortunately many will lose…there is no such thing as achieving the American dream! That dream passed away many moons ago. We let the Chinese and other slave labor markets manufacture products that we think we cannot live without ….believe me WE CAN live without.. you see, we are now living without good paying jobs, sending our children to college and their children will work at Walmart to sell Chinese manufactured products!!! ‘HELLO ‘ Can we all see what is happening! It can’t happen overnight, but we have to stop buying the garbage ‘THEY’…”.Because it’s they” produce and buy what we produce. We will then start to really make America Great Again. And not because Donald Trump says so.. it’s all of us who have to stop this…BOYCOTT, BOYCOTT And BOYCOTT until the cows come home!

  39. Yerfej says:

    World trade sounds good until you realize enriching the top 0.001% doesn’t help anyone else and especially those who have no future. But don’t worry the GDP numbers look good and that’s enough for the pontificators.

Comments are closed.