Cargo containers shipped by freight trains of the China-Europe Railway Express are stacked at the Chengdu Railway Port. Photo: AFP
David P. Goldman, Asia Times: Washington is wrong about China’s economy
The US economy is weaker, and China’s stronger, than analysts believe
Americans want to believe that their economy is doing well and that China’s economy is doing badly, as President Trump keeps saying. One shouldn’t blame Trump for this – underestimating competitors is America’s national pastime.
A recent embarrassing example was a report by Wells Fargo analyst Roger Read featured on CNBC, claiming that a fall in the growth rate in China’s diesel consumption “is most likely tied to economic factors and the effects of the tariff ‘war’ with the US.”
As physicist Wolfgang Pauli once said, this isn’t even wrong. The fellow from Wells Fargo failed to observe that China’s rail traffic is growing 10%, year-on-year, which is also the rate of expansion of China’s rail network. The more China ships by rail, the less dependent it is on diesel trucks.
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WNU Editor: I am aware that China's use of diesel has decreased significantly in the past few quarters, and no, it is not because trains are replacing trucks to move goods. The majority of goods in China, like the U.S., are dependent on being transported by trucks. And that is going to continue for the foreseeable future. So no to the statement that China's economy is stronger than what many believe. But I do agree with the above post that the U.S. economy is weaker than what the stats are showing. A credit crunch is going to happen, and like all credit crunches it is going to slow down growth. The question that remains unanswered is .... when will this crunch happen?
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