There is something perversely satisfying in watching humans screw up on a massive scale, and especially so if you've seen it coming for years. China's time has come. They're going down. Late last week there was a "surprise" interest rate cut to spur borrowing and growth. And then today we found out that China’s Import Growth Misses Estimates for June.
China’s imports rose less than anticipated in June, pushing the trade surplus to a three-year high and adding pressure on the government to support demand as the global economy slows.
Inbound shipments increased 6.3 percent from a year earlier, the customs bureau said in a statement today in Beijing, compared with the 11 percent median estimate in a Bloomberg News survey of 32 economists. Export growth slowed to 11.3 percent and the trade surplus rose to $31.7 billion.
It is hard to believe official growth numbers emanating from China, but if we can believe their customs data, oil imports have slowed dramatically.
BEIJING, July 10 (Reuters) - China's crude imports plunged in June to their lowest daily rate since December, coming off a record high in May, customs data showed, as refiners cut imports amid slowing oil demand in the world's second-largest oil consumer and crude buyer.
Demand growth in China is one of the biggest drivers of global crude markets. However, in April, oil demand in China posted its first yearly fall in at least three years and edged up just 0.8 percent in May as economic growth slowed.
"The high crude imports in May didn't match the actual demand from refineries, resulting in high inventories. Refiners have to cut imports from June," said a Beijing-based oil analyst.
"Commercially, refiners have no motivation to import more crude as they are cutting crude runs. Strategically, we have not seen any new state storage put into operation recently. So I don't think crude imports will rebound quickly."
Crude imports in June were 5.29 million barrels per day (bpd), up 10.3 percent from a year earlier, customs data showed.
June imports were 12 percent, or around 710,000 bpd, lower than the record 6.0 million bpd imports in May.
For the first half of this year, crude imports rose 11 percent on the year to 5.62 million bpd, the data showed.
So now we can add crude imports to the data which indicates that coal is piling up at Chinese import terminals. Energy consumption always provides a good proxy for real (inflation-adjusted) economic growth. (That rule applies to the United States, too.) The clincher is that China is cutting fuel prices to spur demand.
BEIJING, July 10 (Reuters) - China, the world's second-largest user of fuel, will cut retail prices by around 5 percent from Wednesday, its third reduction in just over two months and a move that leaves refiners in the red but may lure consumers back to the pumps.
Oil demand in China, which still makes up nearly half of the incremental global total, posted its first yearly fall in at least three years in April and edged up just 0.8 percent in May as economic growth slowed.
With effect from Wednesday, the ceiling for gasoline retail prices will be lowered by 420 yuan ($65.9) a tonne and diesel price by 400 yuan, the National Development and Reform Commission said.
The latest cut would bring the reductions to a combined 13 to 14 percent since early May, which came off record highs of about $1.22 per litre for diesel and $1.17 for gasoline.
"Let's hope for the demand to come back after this cut, so that our tanks won't be that full," said an official with a state refiner.
But industry officials were reluctant to predict that the cheaper fuel would spur an immediate rebound in consumption.
"There are few signs yet of a real power shortage this summer, the logistics sector is lackluster...It could mean the real economy is weaker than we thought?" said a fuel marketing official with top refiner Sinopec Corp.
Could this mean China's real economy is weaker than we thought? I don't know. Does a bear shit in the woods? Is the Pope Catholic?
Fortune's Gordon Chang has been predicting China's crash for over a decade now, so he is particularly pleased to see his prediction finally borne out. The Daily Ticker posted the video below in China’s Economy Has Completely Flatlined: Gordon Chang.
For global crash watchers, China is the last piece of the puzzle. Once the biggest Asian Tiger goes down, that's all she wrote. It looks like that time has come.