The Slowdown in ChinaOn China and trade: This first graph shows the combined loaded inbound and outbound traffic at the ports of Long Beach and Los Angeles in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). Although containers tell us nothing about value, container traffic does give us an idea of the volume of goods being exported and imported.
Inbound traffic grew quickly for a number of years, but appears to be declining (there is a strong seasonal component). Inbound traffic is off almost 14% from June 2007.
Outbound traffic was flat for years, but has been increasing the last few years. Outbound traffic is up 12% from June 2007.
A few key points: Imports have slowed, and U.S. exports are increasing fairly rapidly. This means the trade deficit (especially ex-petroleum) is also decreasing. This change in the trade balance is probably due to the weak dollar and the weak U.S. economy.
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The danger is that China - and the rest of the global economy - will slow down too quickly, and U.S. exports will be negatively impacted. That could lead to more unemployment in the U.S. than I'm currently forecasting, and also a deeper recession.