The slowdown in global economic activity has been accelerated by COVID-19 but was ongoing well before it as debt weight and aged populations continue to curb consumption. This has implications for all countries but particularly those with less household wealth who have built their economies on the presumption of ever-expanding consumer debt and leaping demand abroad. China–the world’s second-largest economy–is a key example. See China’s debt collectors flourish as consumers flounder in COVID-hit economy.
China has been the largest commodity consumer over the last couple of decades in order to build domestic infrastructure and export goods for other countries. Now, intensifying trade wars and the deepest recession since the 1930s are hurting demand for both finished goods and most raw materials globally. Chinese economic expert Leland R. Miller understands the numbers and impacts in more detail than most and his recent discussion with Danielle DiMartino Booth is worthwhile.
Economist Danielle DiMartino Booth sits down with Chinese Economy expert Leland Miller. About the guest: Leland R. Miller is the Chief Executive Officer of China Beige Book International. Here is a direct video link.
According to the United Nations COMTRADE database on international trade, Canada exported US $17.49 Billion in goods to China during 2019, 93.5% of it was commodities. Diversifying our economy to increase finished goods and services as well as household savings (rather than debt) is critical to our future prospects. Miller speaks specifically about the challenge to commodity exporters starting around the 25-minute mark in this interview. He opines on the US dollar benchmark currency status starting around the 1:12 mark.
