Concurrent to more survey-based indications of a US manufacturing slowdown, economists have been quick to blame overseas problems such that it leaves a “strong” US economy as a baseline. On the other side of that equation, China’s manufacturing likewise is rapidly declining but somehow with the same point of blame. Both Chinese PMI’s were decidedly weak, with the private version far more so than the government’s number.
The government’s official gauge of factory activity improved with the manufacturing PMI rising to 49.8, up from August’s three-year low of 49.7 but still marking two straight months of decline. Meanwhile, a private survey by Caixin/Markit revealed PMI fell to a fresh six-and-a-half year low of 47.2, ticking down from August’s reading of 47.3 but still better than an earlier flash estimate of 47.
A big part of this renewed descent is apparently Chinese exports:
Total new work fell at the quickest rate in over three years, partly driven by a steeper fall in new export business, Markit said in a report. As a result, companies cut output at the sharpest rate in six-and-a-half years, while staff numbers fell at the quickest pace since the start of 2009.
US manufacturing declines on “overseas” weakness while Chinese manufacturing declines on “overseas” weakness as if the two economic systems never deal with each other, only the same, non-specific “global economy” that doesn’t somehow count either of them within its growing malaise? It seems far more likely, beyond a doubt, actually, that with the amount of trade between them (especially from China to the US) if Chinese manufacturing is declining than US “demand” is a problem.
Any chronology of China’s post-Great Recession descent follows exactly that relationship. US economists are quick to assert a break, where the US economy has surged since the unemployment rate is so low but
Originally appeared at: http://davidstockmanscontracorner.com/how-can-china-blame-exports-too/