Global Trade Collapsing, China Now Japan's Top Trade Partner

Tyler Durden's picture

The Japan External Trade Organization has released its latest trade figures, which paint a grim picture for foreign trade by the world's second largest economy. Year to date imports have dropped by 31.9% to $252.9 billion, while exports have plunged 36.8% to $252.2 billion. Most stunning is the disclosure on trade flows with the United States: exports to the US have dropped by 43.5% to $40.5 billion, resulting in Japan's largest positive trade balance. Another development is that China has now replaced the US as Japan's primary trade destination. However that is not saying much: trade with China has declined for the 8th consecutive month. The last fact is among the primary reasons why the Chinese Central Bank has blown a credit bubble of epic proportions in order to mitigate the unprecedented collapse in Chinese trade with its traditional trade partners.

To make up for the estimated 20% decline in Chinese exports, and in order to "maintain" the artifical minimum 8% growth of the economy, the Chinese bank has to redirect consumption to internal sources of demand, which can only be achieved by providing virtually free credit. The problem with that is that practically all of mainland China has taken the free cash and invested it in the stock market. The eventual collapse of this fake liquidity transfer will be one for the ages.

In the meantime, JETRO's notes the following on Japanese-Chinese trade relations.

Overview of Japan-China trade in the first half of 2009

Japan’s trade with China posted negative growth (year-on-year) for
eight consecutive months, from November 2008 to June 2009. The decline
was attributed to China’s economic slowdown and a drop in external

In the first quarter of 2009, imports and exports were down across
the board due to weakened economies in Japan and China, as well as a
build-up of inventories in China as external demand fell off.

The second quarter, however, saw an increase in exports of some
machinery-related products, fueled by increased infrastructure
investment in China due to the government’s 4-trillion-yuan
(approximately 56 trillion yen) economic stimulus package. A recovery
was also seen in exports of parts and materials used in production of
finished goods for sale in China, reflecting growing demand in the
country for home appliances in part due to the government’s consumption
promotion measures such as the “Home Appliances to the Countryside”
subsidy program. In addition, imports of some home appliances and food
products showed signs of recovery in the quarter.

The drop in Japan’s trade with China (with falls in both imports
and exports) was smaller than that for the nation’s overall trade. As a
result, the share of Japan-China trade rose to 20.4% of Japan’s total
trade, the highest level ever (on a semi-annual basis). Japan’s exports
to China also set a record (also on a semi-annual basis), making the
country Japan’s largest export destination and eclipsing the US for the
first time.

And here is the summary for year-to-date exports and imports as presented by JETRO.



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Project Mayhem's picture

Yeah so we have global economic collapse basically... Seven months into the year -- 31.9% drop in imports, 36.8% drop in exports, and 43.5% drop in exports to the U.S. counts as collapse in my book.


Sqworl's picture

OMG...the sky is falling...;-(

SloSquez's picture

On that note I'm buying 10,000 shares of DRYS in the morning.  Goin to fly, I guess.

D.O.D.'s picture

If anyone is interested I went long SP500 via UPRO today, that should be the surest signal this thing is goin' down... just fyi....don't say I didn't tell you...

AndItsGone's picture

I went short via SPXU, just as powerful a bullish signal. Clearly, the S&P will now go exactly flat forever, resulting in the slow depreciation of both our investments to fees and expenses.

Anonymous's picture


ng2amarinefunk's picture
ng2amarinefunk (not verified) Project Mayhem Aug 20, 2009 10:50 PM

yeh, great 'tradeable' information, for me to know that THEY, the 99/100 now know - the critical mass has been achieved,

and faster than you can say 1987 program trading, i think maybe August 21 2009 Friday will come down as the greatest Magician Show in History - the 'trickster' RAVEN, massed for the last couple of days 'in conference' -

how to do the 'final fleecing' of Joe Six Pack and his Metastock on the laptop, trying to beat out Goldmans neuronet - a day in history that Grandpa will tell his children in the year 2o45

its NOT the facts,

its the Perception of the facts, is God in the Oxford University Quad, perceiving and conceiving, creating the RealMoment, the Existential Reality?

Is not Berkeley the Red schoolhouse?,but everyone KNOWS THAT! really? really so, eh?

the old Bishops Solipsism ?  Shall we NOW see something NOBODY can even remember this day in history - or shall it be another banal nothing happening sort of day?

Anonymous's picture

You are not one of us, your comments make no sense. I do not believe you are crazy, I just believe you are either a robot or trying to discredit this blog or both.

Anonymous's picture

They do make sense, you just have to think a little to understand them. Did it occured to you that not everybody in this world is a native english speaker, maybe.

Anonymous's picture

Denise, this is your producer. I'm waiting........ Swallow you bitch. Good, now get on the table..... Good. Now shut the fuck up while I,...I....Oh yeah. You know you're getting a little loose there, we're going to have to take you back to the doc and put in a few more honeymoon stitches.

MountainHawk's picture

When is the stock market going to get hammered again? Everyday, it goes up defying all odds.... any guesses to when we might see some 'serious' pull-back...

Pizza Delivery Man's picture

Somepoint between now and the future.

Printfaster's picture

During the Thanksgiving day after hours market in Bhutan.

Gilgamesh's picture

Between 4pm and 6am ET, usually Sun-Thurs.

TumblingDice's picture

When China appreceites the yuan.

peoplesdemocraticsocialistrepublicofmaryland's picture green shoots there......


Thx TD!

waterdog's picture

Is it true that Mr. Durden was on the radio today?

Mannwich's picture

Yes, I listened to Tyler's long interview with Pimm Fox on Bloomberg radio.  Couldn't believe they gave you so much air time.  Good stuff.

phaesed's picture

Does anyone have a link to a copy of the recording?

Anonymous's picture

TD, I need to piggy back off Mountainhawk in a way. I am also bearish and have been getting hammered being short, still short, and will be. But you haven't forecasted time frame in which we can see the ultimate collapse and debacle. All the charts and indicators you are throwing up every five minutes show that the end is near and that the monetization will come to a certain skidding hault. Don't be misunderstood I am not seeking your stock advice, I am short and will continue to be....your input is appreciated.

Anonymous's picture

So ....I'll be the first to say it....



GS commodity desk ready to take oil parabolic tomorrow....

Anonymous's picture

think you mean "hit the OFFER" (or ask)

Commissionable's picture

TD, piggy back on Mountain Hawk here, when is this collapse in the US Market coming, China dropped 3.7% and we closed up for the day, all the charts you post pose a debacle of monumental sizes and yet 10,000 dow here we come? Being as Bearish as I am, I don't see the catalyst which will bring the runnaway train to a screaming hault or even right off the tracks. Whats your forecast, again im short and staying short......the pain is not even an issue now, forget stop the bleeding..its way beyond that.

ng2amarinefunk's picture
ng2amarinefunk (not verified) Commissionable Aug 20, 2009 10:36 PM

ANOTHER FOLLOWER, 'please tell me' best YOU avoid 'trading' in the market, and go back to your job-site, thank you, keep cranking out the canned goods, and stuff PLEASE

Anonymous's picture

I think you should focus on posting intelligent stuff on this site and not your bullshit theories and rants. Tone it down a little bit man you are just degrading this site. I've been reading Zero Hedge since January and the comments section used to yield a great amount of information from unbiased people. Your complaining seems retarded to say the least and I'd appreciate it if you took your rants elsewhere, pal.

dnarby's picture

I agree in asking the rhetoric be turned down.  More signal, less noise.

I need more cowbell's picture

At least get a better avatar. I'll let you in on a little secret, being a geek is really not cool, we still make fun of you behind your back. Your face is scaring the children, dude.

Dr Hackenbush's picture

Talk about the 'light-rail' laying its own track. 

lsbumblebee's picture

Don't worry. The U.S. still has nuclear armaments and helicopters that crash to keep the free markets safe from democracy.

ng2amarinefunk's picture
ng2amarinefunk (not verified) lsbumblebee Aug 20, 2009 10:54 PM

Yes, indeed, we do more than the entire rest of the World combined - AND THAT SIRE is the REASON why the USA dollar shall prevail, just in case good common sense does not

ratava's picture

lol, you are my fav troll

Anonymous's picture

Do not let your emotions overtake your rational investment decisions. China's growth is not a bubble folks. There are decades of pent up domestic demand growth yet to play out.

dnarby's picture

Pray tell what is the analysis you have that contradicts what I'm reading.

'Cause what I'm reading that says "China stimulus went into stock market" is really, really f*ckin' good, man.

Anonymous's picture

I have substantially invested in credit default swaps on Schrödinger's cat. Everyone, please, do not look in the box.

Anonymous's picture

Green shoots are piling up at the ports waiting to be shipped. Saw it on CNBS...

buzzsaw99's picture

It can't get any worse. Green shoots of bamboo everywhere. Green shoots!

ghostfaceinvestah's picture

Trade is meaningless in the New New Economy.

Trading is all that matters.

ng2amarinefunk's picture
ng2amarinefunk (not verified) ghostfaceinvestah Aug 20, 2009 11:00 PM

'trading stocks' without World Trade ain't feasible,

fortunately World Trade will continue, chasened a bit, but the better for it, and 'Trading Stocks' will, too, continue -

the smart money will continue to fleece the dumb money, EVEN IF THE PLAYING TABLE WERE LEVEL,

there's really SOME people who just shouldn't be 'trading stocks' at all, they just don't get it, won't get it and will wash out totally, very very soon

chindit13's picture

Question: When will the market collapse?

Answer: When things are so bad that no exchange nor institution will be able to pay off any still-existing shorts.

Doesn't seem fair, but that's the way it is.

poydras's picture

This June data has been out for a while.  We (USA) are the world's trade patsies.  I find the Japan trade data most interesting.   Conditions have improved, but are way off peaks.

I suspect the world will help us out to some extent.  That extent involving a noticeable decline in our standard of living.  No Virginia, you can't keep on borrowing.

Anonymous's picture

Just heard a decidedly non-green shoot on CNN International:

9.2% of all US mortgages are 30 days or more behind, and 13% of all homeowners are termed "in trouble" on their mortgage. This excludes the millions already foreclosed upon.

The only way there is any "bottom" in this data is that perhaps homeowners will be using their mortgage notes instead of Charmin.

Somehow---I am not clever enough to determine the convoluted illogic---this has to be wildly bullish for BAC and C and WFC, so I expect another 8% up day for the likes of C.

Anonymous's picture

Trade collapsing? Now that the S&P500 has reached 1000, Kotok and others are talking about it regaining the "Lehman Gap" and reaching 1200, possibly as soon as October.


I'm glad I'm sitting this thing out in cash. If I had massively shorted this thing like I wanted to, I'd be having my arse handed to me by the green-shoot smoking crowd.

acrneer's picture
acrneer (not verified) Aug 21, 2009 12:06 PM

Another interesting day in bizarro world. Must kill dollar, must prop markets

good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions

Anonymous's picture

Trade collapsing? Now that the S&P500 has reached 1000, Kotok and others are talking about it regaining the "Lehman Gap" and reaching 1200, possibly as soon as October.


I'm glad I'm sitting this thing out in cash. If I had massively shorted this thing like I wanted to, I'd be having my arse handed to me by the green-shoot smoking crowd.