Since then the index has only recovered a little and many other statistics have proved our assessment of the situation was correct.
The latest confirmation came this week from China, where reported trade data for the month of July more disappointing than the previous month, which in turn had been worse than May. Exports and especially imports fell more than expected in July in a rocky start to the year's third quarter, suggesting the measures taken by the Chinese government to kick start the economt have failed to generate a substantial recovery, and pointing to further and accelerating weakness in global demand. This explainins the recent scramble by central banks to unleash even more monetary easing (it was nothing to do with Brexit, that was just a convenient scapegoat.
Economists polled by Reuters had expected trade to remain weak but show some signs of improvement as factories began to gear up for the peak year-end shopping season.
That has not happened, as imports fell 12.5 percent from a year earlier, the biggest decline since February. suggesting China's domestic demand may be faltering despite a round of quantitative easing (pumping fiat money into the economy) to stimulate economic growth. "I think (the drop in imports) is mainly from the demand side," said Ma Xiaoping, an economist at HSBC in Beijing, quoted by Reuters. According to Ma government efforts to cut overcapacity could prove to be counter productive, resulting in an even bigger reduction in demand.
Also notable is the slowdown in Chinese crude oil demand, as China oil imports fell to a 6-month low: China imported 31.07m mt of crude last month, the General Administration of Customs in Beijing says on website. That’s equivalent to 7.35m b/d, lowest since January.
The bad news goes on. Exports fell 4.4 percent on-year, the General Administration of Customs said on Monday, while adding that it expects pressure on shipments likely will start to ease in October. That resulted in a trade surplus of $52.31 billion in July, the biggest since January, versus June's $48.11 billion. While oil imports may be declining, oil product exports hit 4.57 million metric tons with net oil product exports at record 2.49metric tons, as China continues to flood the world with diesel and gasoline exports.
For the January to July period, China's exports fell 7.4 percent, while imports fell 10.5 percent, roughly on pace with last year's 8 percent decline. China's imports have now declined for 21 straight months, while exports have fallen for 12 of 13 months, helping to drag economic growth to its slowest in a quarter of a century.
"Signs of stronger manufacturing activity among many of China's key trading partners has so far failed to lift export growth," Capital Economics' China economist Julian Evans-Pritchard said in a note. "The country's export growth is likely to remain subdued for some time."
China's exports underwhelmed despite still-strong shipments of steel and oil products, with the latter hitting a record. China has come under fire from trading partners accusing it of dumping its excess industrial capacity in global markets.
Forget the figures from the rigged Stock and commodity exchanges, forget the rosy looking employment figures, the reality is the global economy is more fucked up than it was in July 2008. And we all know what happened a couple of months after that.
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