Bloomberg (September 25)
“China is the biggest buyer of Australian goods from iron ore to coal and food products and a windfall from recent elevated commodity prices helped Canberra report its first budget surplus in 15 years. If Chinese demand were to weaken, it would lower those prices and slim Australia’s trade surpluses, or even return it to deficits.” The Council of Financial Regulators (CFR) found that “The impact of a deeper economic deterioration in China will be mainly felt in Australia through weaker trade and reduced risk appetite in financial markets.”
Tags: Australia, Budget surplus, Buyer, Canberra, CFR, China, Coal, Commodity prices, Food products, Iron ore, Risk appetite, Trade surpluses, Windfall
Wall Street Journal (July 9)
“Slack Chinese imports are a symptom of the underlying reason China’s trade surpluses, not just with the U.S. but the world, persist: China consumes too little and saves too much.” Though China’s surpluses have shrunk as a share of GDP, due a decade of explosive GDP growth, the surpluses “remain enormous.” Domestic “consumption is still under 40% of Chinese GDP, one of the lowest ratios among major economies. The persistence of those imbalances is why trade conflicts aren’t about to go away even if Mr. Trump isn’t re-elected.”
Tags: China, Conflicts, Consumption, GDP, Growth, Imbalances, Imports, Saves, Slack, Trade surpluses, Trump, U.S.
