Chart of the Day – 2.11.2009

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CHART OF THE DAY…. This is from Brad Setser. Chinese exports are down 17.5%, but imports are down a stunning 43%:

What worries me the most? The possibility that the sharp y/y fall in imports doesn’t just reflect a fall in imported components or a fall in commodity prices, but rather a major deceleration in China’s domestic economy….At a time when the world is short demand, China seems to be subtracting from global demand not adding to it. The best solution: an absolutely enormous domestic stimulus in China.

A massive stimulus in the United States is probably necessary, but it’s still a dicey proposition since we’re running a big trade deficit and need to curtail our domestic consumption in the long run. But China is running a big trade surplus, which makes it unproblematic for them to increase domestic consumption, and their economic growth last quarter was perilously close to zero. They’re the ones who really need to stimulate their economy. If the Chinese economy tanks, the rest of the world will get dragged down even further with it.

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FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

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