China’s Imports Outright Declined In March, And COVID Was The Reason Why But Not Really

This message was a clear signal, way back when, how globally synchronized growth wasn’t anything other than a bumper sticker slogan invented by desperate Western central bankers and Economists to keep their critics from riling an increasingly angry public.

Xi’s program was to convert China into a system which would no longer rely so much on external factors driving its economy simply because, post-2011, it had become clear that the global economy was never coming back.

The Chinese had realized they couldn’t count on external demand from being the world’s manufacturer to keep driving toward Deng Xiaoping’s previous vision of future prosperity. There was only going to be less and less external demand because there had been no recovery from the first Global Financial Crisis; the Communists had to plan accordingly.

No one outside wanted to believe this.

For China’s de facto dictator, what better way to impress upon his sore subjects his continuing vision than his otherwise irrational, insane Zero-COVID? Madness to Xi’s method, to the point of literally starving (slight hyperbole) one of the world’s most populous cities; maybe two.

It’s Xi’s way or the lockdown. Zero-COVID allows him the excuse to flex his internal muscle, and not just for those outsider Hong Kong-ers, directly in the face of everyone in mainland China, especially those who might be predisposed to have grown economically unhappy in the increasing absence of quantity growth.

Not only that, it does so in keeping with that whole quality thing; see, the government says, we told you we will no longer prioritize the economy over everything else, being so diligent about the corona only exemplifies the Communist’s 19th commitment to less economy.

At the end of the day, locked down or not, that’s the inevitable result; less economy.

Less economy because of COVID? Too darn bad. Less economy because of de-globalization? Doesn’t matter. Less economy as global recession sneaks onto the horizon? Xi don’t care so you better not either! I mean, this is all Maoism 101.

Now analysts are shocked China just reported a drop in March 2022 imports. This sudden appearance of a negative number is being blamed, of course, on the corona and the current lockdowns. I think that’s true, though for vastly different reasons as stated above.

According to China’s General Administration of Customs (GAC), exports heading out of the allegedly clogged and blocked Chinese ports rose by 14.3%. Sounds great, except most of it is price changes rather than volumes shipped out. Too hard to sail them, or too many goods already sailed and piling up everywhere else?

There is the same price illusion to consider on the import side, which is where the March 2022 update really shocked with its recession-y tendency.

I have to believe the market, and the money (eurodollar), absolutely agree on these risks perceived from a more honest assessment of China’s woeful situation.

So, again, where are they?

One forward-looking, the other from other reasons in the past.

Why else would Xi pursue what he’s pursuing? The Communists could, like many Western governments now are trying, just declare victory over the coronavirus and move on. Claim the past lockdowns all worked and led to the far less dangerous strain of omicron as representing the successful transition to the disease’s next, post-pure awful phase.