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)

Chinese_exports_1

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.

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Category: Markets

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