For China, Good News is Bad News
China may be beating all its historic trade records, though this in no way reflects its industrial power.
The post For China, Good News is Bad News appeared first on LUXUO.
Image: Li Yang/Unsplash
China?s trade surpluses are beating all their historic records. Despite the stagnation of its national consumption, China is racking up trade surpluses in the way of US$94 billion per month. This good news is however not so good because of the strong correlation between a nation?s trade balance and its overall consumption.
These enormous figures of China?s in no way reflect the country?s industrial power. The ballooning of its trade surplus, in reality, shows only the great difficulty it has in balancing out its economy and controlling its colossal amounts of debt. While China has nearly doubled its trade surplus in the space of two years, the reason for it is a simple mechanical one, with its exports having increased compared to its imports that have been in free fall due to dwindling national consumption. And while increased exports generally mean good news for a country on a macroeconomic level, China cannot and should not be excited over its excellent figures, because they are above all the symptom of persistent ? endemic, even ? income inequality amongst its population.
READ MORE: LVMH Doubles Profit in 2021, Remains The Leader of Luxury Goods
Image: Nuno Alberto/Unsplash
At most, China?s trade surpluses allow it to maintain production ? and therefore to avoid l...
The post For China, Good News is Bad News appeared first on LUXUO.
Image: Li Yang/Unsplash
China?s trade surpluses are beating all their historic records. Despite the stagnation of its national consumption, China is racking up trade surpluses in the way of US$94 billion per month. This good news is however not so good because of the strong correlation between a nation?s trade balance and its overall consumption.
These enormous figures of China?s in no way reflect the country?s industrial power. The ballooning of its trade surplus, in reality, shows only the great difficulty it has in balancing out its economy and controlling its colossal amounts of debt. While China has nearly doubled its trade surplus in the space of two years, the reason for it is a simple mechanical one, with its exports having increased compared to its imports that have been in free fall due to dwindling national consumption. And while increased exports generally mean good news for a country on a macroeconomic level, China cannot and should not be excited over its excellent figures, because they are above all the symptom of persistent ? endemic, even ? income inequality amongst its population.
READ MORE: LVMH Doubles Profit in 2021, Remains The Leader of Luxury Goods
Image: Nuno Alberto/Unsplash
At most, China?s trade surpluses allow it to maintain production ? and therefore to avoid l...
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