Chinese exports, which were growing 10% faster than world trade in 2002, are now growing nearly 20% faster, according to Charles Dumas of Lombard Street Research. Asian surpluses contribute to the US deficit “problem.” The dollar-yuan currency contains the undervalued yuan as well as the overvalued greenback.
Chinese and World Exports (12 month MA, Y/Y)
Source: Lombard Street Research
Dumas believes China is slowing, and will likely to suffer a hard landing. Rapid export growth – even unfairly rapid export growth – will be welcome in 2005.
Quote of the Day:
“To me, the ‘Tape’ is the final arbiter of any investment decision. I have a cardinal rule: Never fight the tape!” – Martin Zweig