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China's economy shows more weakness as imports, exports fall

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Good opportunity for Japan to regain its top position and become Asia's No.1 economy (?!)

-3 ( +4 / -7 )

It seems that big slump has come to China finally and would get worse to the bottom.

2 ( +3 / -1 )

some14someJun. 09, 2015 - 07:19AM JST

Good opportunity for Japan to regain its top position and become Asia's No.1 economy (?!)

Chinese GDP is more than double japan' s GDP, so it's impossible in the foreseeable future.

import fall can be explained by falling oil price China just save $100 billion on its oil import bill in just six months

-2 ( +2 / -4 )

some14someJun. 09, 2015 - 07:19AM JST

Good opportunity for Japan to regain its top position and become Asia's No.1 economy (?!)

A total misread of the situation. This is bad for Japan for 2 reasons

It's the starting gun for a currency war in north east Asia, which Japan and Korea will eventually be the big losers. Japan's recent GDP growth of 3.9 % was nearly exclusively a result of exports and capital spending by domestic companies. Domestic consumption only rose by 0.4%. When China stops its currency rise against the yen, it means that it will be devaluing its currency against a basket of other currencies, including the Taiwan dollar and Korean Won. The Koreans and Taiwanese will behave likewise and on the way to the bottom, Japan's export advantage gained by the present currency devaluation will dry up. Also those Japanese domestic companies who have invested in capital spending have done so on the assumption of a pick-up in the world economy. They know that with Japan's economic structural problems and a decreasing population, there will be very little rise in domestic consumption. Apart from Abe and Kuroda giving every Japanese national a Y100,000,000 to spend as they want, nothing can be done to improve Japanese domestic consumption. Japanese companies know this and that is why they are hoarding their profits or investing them in capital spending elsewhere than Japan. China is Japan's second biggest export market and if companies see that China's markets are not growing, they'll very quickly cut off that capital spending.

Without the Yen weakening advantage and capital spending, the Japanese economy will be back to where it was in 2012, before Abe and Kuroda. Except the national debt will have grown by 30%, the BOJ will be the biggest owner of Japanese government debt and the Japanese consumer will be poorer.

2 ( +4 / -2 )

I think China's is grinding to a halt in many arenas of its economy. Too many issues are catching up with them at the same time, coupled with sky rocketing debt, its does not paint a pretty picture.

0 ( +2 / -2 )

I think China's is grinding to a halt in many arenas of its economy. Too many issues are catching up with them at the same time, coupled with sky rocketing debt, its does not paint a pretty picture.

Define skyrocketing debt. Japan-level, or??

-2 ( +0 / -2 )

Define skyrocketing debt. Japan-level, or??<

More than Japan's level. In this case we're talking about private sector debt and not public.

Chinese have heavily borrowed to grow, so it's not looking very good. Japan has already paid off all its debts for the most part since the deleveraging post bubble.

1 ( +2 / -1 )

More than Japan's level. In this case we're talking about private sector debt and not public.

Why only talk about the private sector debt and not include the public sector debt? Is it because Japan's public debt is too unbelievably scary to even mention and wouldn't really bode well with whatever you're ultimately trying to argue about?

0 ( +1 / -1 )

ThePBot: Is it because Japan's public debt is too unbelievably scary to even mention ...

Yeah. How's that Fukushima cleanup going?

1 ( +1 / -0 )

@ Bach T. Tran

Japan has already paid off all its debts for the most part since the deleveraging post bubble.

-Are you sure about that? Take a look at this link:

http://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS

Now combine that data of the private sector debt with the public debt, it goes off the charts. And also take time to compare those numbers with other countries too, like that of China or the US. It's actually remarkable how the most developed countries in the world have the biggest total debt.

0 ( +1 / -1 )

in the graph there it shows china came back on level terms. anyway exports and imports increasing means they are doing great at balancing their main stategic partners

-1 ( +0 / -1 )

ThePBot

The link provides data of lending of the private sector. If a private corporation borrows money it could mean one of two things the company not able to make end's meet or investing in new equipment so they can answer to new demand, the former means the economy is banking the latter means the economy is booming. You really can't tell with just looking at how the economy is doing with your chart alone. Better way to judge would be to just look at how much the private sector is investing in equipment.

0 ( +0 / -0 )

@Triring

I understand that, but I wasn't trying to use that chart to see the state of economies in countries, rather, I was just merely replying to Bach T. Tran who said Japan paid all of it's debts. He said China's has a skyrocketing debt that's worrying, which is true, but implied Japan didn't (I think he said Abenomics was working in another article here at JT). Surely that chart I provided says something different. And that's just for the private sector, never mind the public debt. May I ask, do you have a link where it shows private sector investment in countries? I'd be interested in seeing that, although I would say that the private sector investment in new equipment doesn't mean they'll be able to make ends meet in the long run, despite a seemingly booming economy at present. Events, like lowering of demand, can change quickly.

0 ( +0 / -0 )

WHat Gary said, more or less. Japan, and possible China have missed the opportunity to become consumption based economies. I am not sure how or why this has happened, perhaps the US and Canada are the only countries with the proper balance of pop and resources? I am no China basher, but their econ is possible going to hit low growth in the near future.

Japan needs more young people among other things. But the one thing that Abenomics has addressed, is the poor liquidity in the Japanese market.

0 ( +0 / -0 )

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