As usual China's economy is on fire, fueled by their exports. The China trade surplus was $28 billion.
China's July exports of $145.5 billion represented a 38% increase over July 2009, down from June's 44% increase. But growth in imports — which hit $116.8 billion — slowed even more dramatically, leading to the bulging surplus.
Most interesting is how this is downplayed in the U.S. press, for the obvious, confront China on currency manipulation is seemingly only a topic for sound bytes.
Note the different percentage quotes between USA today (above) and the China English newspaper. Both percentages are true but the U.S. press downplays the never ending global imbalance for it means the U.S. must act on currency manipulation as well as other unfair trade practices by China.
Latest statistics show that China's monthly trade surplus trumped almost all forecasts to hit an 18-month high, up 170 percent from a year earlier to $28.7 billion.
In view of the fragile global recovery, most observers believed China could hardly run an even larger monthly trade surplus than what it posted in June, a whopping $20 billion.
Nevertheless, Chinese exporters have managed to sell more last month while import growth has slowed in line with a looming domestic slowdown. On a monthly basis, China's exports in July were up 5.9 percent from June, but imports edged down 0.4 percent from the previous month.
With a trade surplus close to the largest China has ever seen and record overseas sales in July, Chinese exporters have shown impressive capacity to survive what is arguably the worst global recession in more than half a century.
It seems likely that the export sector will remain a powerful growth engine of the Chinese economy for many more years.
Chinese Held USTresuries - Spain's Gold of Sieglo De Oro?
Adam Smith analyzed Spanish Mercantilism of the 17th Century and concluded that the extraction of gold from the New World and filling the domestic Spanish coffers, when little was manufactured, wrecked the Spanish economy. Most mercantile systems suffer an asset accumulation bubble when the asset class deflates.
So maybe the Fed's game is to take away the $837 billion of U.S. Treasuries from the Chinese? Not so because the Chinese turn U.S. trade paper into new or existing Treasuries when the trade paper is paid. The Fed is accumulating domestic U.S. tresuries while China piles up new U.S. debt.
At the same time a land price bubble of epic proportions is taking old due to commercial buying.
The beginnings of the breaking of the Chinese Bubble are underway. China can spend foreign reserves (U.S.)
and buy more land for factories etc. This will not continue forever and the Chinese banks will suffer the sting of the collapse.
Burton Leed
China will not suffer, much, the sting
Because while they prop up the U.S. economy, they are developing their own domestic middle class and thus economy.
There are 1.4 billion people in China, in comparison to the U.S. 307 million. They are also developing other economies...
Their timing is incredible and that's because they have an economic strategy team.
We're just trading places, we become 3rd world, they become the most powerful economy.