China Exports, Rebalancing Scenarios

Business, China, Company Strategy, Economics, US


Source of chart: Morgan Stanley


By John Richardson

CHINA might soon raise export tax rebates, as it did during the 2008-2009 global economic crisis.

Some chemicals and polymers exporters to China would welcome the increase in export tax rebates (this would make re-exports of finished goods from China more competitive).

But on this occasion, overcapacity across several of China’s industries is greater as a result of the investment splurge of 2008-2010.

Western economies are also burdened by deep structural problems.

The worst of possible outcomes, that needs to be built into scenarios for next year, is a global trade war as China exports deflation.

And what might further subsidies for exports indicate about China’s economic direction?

Would raising export tax rebates merely represent a stop-gap measure designed to shore up growth during and immediately after the once-in-a-decade leadership transition?

Or could it indicate a retreat from the economic rebalancing of the 12th-Year-Plan (2011-2015)? This involves a movement away from exports and investment as a driver growth towards greater domestic consumption.

China, as the chart illustrates, has become far-more heavily dependent on investment to drive growth.


As Oil Rises Demand Weakens


By John Richardson A barrel of Brent crude oil cost $88.49 a barrel in June. Yes...

Learn more

The Best Of All Possible Worlds


Source of graph:    By John Richa...

Learn more
More posts
Rate of recovery hugely reliant on effectiveness of government policies

By John Richardson UNLESS MORE action is taken by developed countries to help counter the impact of ...

China bans on single-use plastics move forward with major recycling investments likely

By John Richardson THIS EVENT slipped under most people’s radar in the midst of the pandemic crisi...

Developing world polymers demand unlikely to see quick rebound

By John Richardson THIS IS a tragedy in the genuine sense of the word, not just in the so-often misu...

China’s policy dilemma: raising local demand while protecting exports

  By John Richardson IN THIS Western-centric world, a huge amount of ink is split over the cons...

China’s polyethylene demand good so far in 2020 but beware of risks ahead

Note that all the comparisons in this post are on a year-on-year basis unless otherwise stated By Jo...

Ah, I see: China’s booming demand mystery a little closer to being solved

  Note that all the data comparisons below are on a year-on-year basis By John Richardson THE P...

The China polyester mystery continues in a world turned upside down

By John Richardson SOMETHING very strange is happening in China’s polyester industry which has eno...

China will struggle to boost local retail sales during rest of 2020 with export outlook uncertain

By John Richardson IF IT were easy, then there would be an oversupply of owners of large yachts in M...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more