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China’s Trade Surplus… To the Moon!
China’s trade surplus topped USD100B in July – a historic record for a month (see chart below). What are the main takeaways? First, such a large trade surplus is growth-positive at the margin – an important consideration when other growth drivers (such as household consumption) are still soft, and the consensus growth forecast for 2022 has been cut below 4%. The contribution of net exports to China’s real GDP growth surged above 20% in 2020-21 – not a negligible amount. And this also suggests that authorities will continue to be super-conservative with any additional policy stimulus (on top of the ... (full story)