Why is Chinas Trade surplus still going strong?
Something spooky is going on here. China’s exports are falling fast but imports are falling even faster. In a grossly simplified scenario with constant prices if imported inputs are processed for exports and volumes fall, the trade surplus logically should also fall proportionately…now if the prices of input commodities fall much much faster than exported products, trade surplus can be theoretically maintained at lower volumes… but then why would export product price realizations not be falling when demand in US and Europe is crashing…it has a ring of some manipulation somewhere…unless China has stopped project imports suddenly after the Olympics and the stimulus is slated to correct that… sanjay9negi@hotmail.
