La growth of Chinese exports slowed down to almost a standstill: in July the increase over the year fell to 1%. And the markets have suffered, with the regional index which, after several days of gains, is falling by 0,6%.
Indeed, the market reaction betrays a slight paranoia. For years, Western countries competing with China, as well as international bodies, have been preaching that China must rebalance its economy, focusing less on exports and more on domestic demand. And that's exactly what's happening. In the same days in which the data on frozen exports was communicated, it was also said that retail sales increase year on year by 13,2% (with inflation at 1,8%, a real 11,6% can be estimated); auto sales up 11% in July and investments up 20%. If, according to the latest estimates, GDP has slowed down to 7,6%, it is certain, however, that domestic demand is growing more than GDP, as hoped.
The euro is still around 1,23 against the dollar, and oil remains above 93 dollars a barrel.
http://www.ft.com/intl/cms/s/0/4fcb5914-e1c6-11e1-9c72-00144feab49a.html#axzz236zrzOjq
