Hope For Global Economy As China Exports Surge

China’s exports increased at an unexpectedly rapid pace, up 18% in December compared to the same month in 2008. One economist told Reuters that the data mean that China’s GDP rose 11% in the last quarter of 2009 and that factory production was probably up 25% in December.

The more startling news from China is that imports jumped 56% in December.

China’s consumer economy and manufacturing activity are much, better than expected if the import numbers are right. China is in the process of creating the world’s largest middle class and the nation’s $585 billion stimulus program put enough liquidity into the market to give that middle class access to capital. The money also almost certainly allowed companies to increase their factory capacities and output.

China’s increased imports of raw goods and materials would have been needed to fuel the manufacturing activity needed to satisfy the demand for exports of the world’s most populous nation.

All of those exports have to be going somewhere unless they are being stored on Chinese docks and in Chinese ships. The export figure for December are a sign that consumer spending in China’s trading partners is rising. That would almost certainly have to be true in the US because of the size of the U.S.-China trade relationship.

The world economy is almost certainly expanding if the world’s largest exporter is exporting so much.

Douglas A. McIntyre