{"id":16292,"date":"2016-01-11T15:11:27","date_gmt":"2016-01-11T20:11:27","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16292"},"modified":"2016-01-11T15:11:27","modified_gmt":"2016-01-11T20:11:27","slug":"chinas-hard-landing-to-trigger-meltdown-in-india-we-will-see-another-crisis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16292","title":{"rendered":"China’s Hard Landing To Trigger Meltdown In India: “We Will See Another Crisis”"},"content":{"rendered":"

China’s Hard Landing To Trigger Meltdown In India: “We Will See Another Crisis”<\/a><\/h3>\n
<\/div>\n
\n
In late September, India \u201csurprised<\/a>\u201d 51 out of 52 economists by cutting rates a larger than expected 50 bps.<\/div>\n
\n

Despite RBI Governor Raghuram Rajan\u2019s penchant for catching markets off guard and despite the fact that exports had fallen for eight consecutive months, economists still failed to predict that anything more than 25 bps was in the cards.<\/p>\n

\u201cThe weakness in India\u2019s exports is striking, not only in terms of past trend, but also from a cross country perspective,\u201d Deutsche Bank wrote at the time. \u201cIndeed, India\u2019s exports performance has been the weakest in the region in 2015.\u201d<\/p>\n

In short: in a world gone Keynesian crazy, you live and die by your willingness to engage in competitive easing and with China having just a month earlier moved to devalue the yuan, India had little choice but to cut lest the export picture should darken further.<\/p>\n

Since then the malaise has deepened.<\/p>\n

Exports have now fallen for 12 straight months\u00a0<\/strong>and although some of the decline is probably attributable to slumping prices (as opposed to lower volumes), it\u2019s worrisome nevertheless.<\/p>\n

\"\"<\/p>\n

\u201cIndia\u2019s external trade likely fell for second consecutive year in FY16E, with both exports and imports contracting by 18.5%YoY and 17.2%YoY in the period Apr-Nov\u201915,\u201d Citi notes, adding that \u201cthe meltdown in India\u2019s exports and imports was even sharper than the global trade<\/strong>which contracted by 12- 13%YoY.\u201d<\/p>\n<\/div>\n

\"\"<\/p>\n

On Friday, in the wake of China’s continued devaluation of the yuan, Indian Trade Minister\u00a0Nirmala Sitharaman expressed concern about the effect a sharply weaker RMB will have on her country’s trade deficit with Beijing. “It’s worrying,” she said.\u00a0“My deficit with China will widen.”<\/strong><\/p>\n

India is now looking at ways to prevent a flood of cheap imports from hitting domestic producers. \u00a0“India steel companies such as JSW Ltd have asked the government to set a minimum import price to stop cheap imports undercutting them,”\u00a0Reuters writes<\/a>. “A similar measure was adopted in 1999.”<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

China’s Hard Landing To Trigger Meltdown In India: “We Will See Another Crisis” In late September, India \u201csurprised\u201d 51 out of 52 economists by cutting rates a larger than expected 50 bps. Despite RBI Governor Raghuram Rajan\u2019s penchant for catching markets off guard and despite the fact that exports had fallen for eight consecutive months, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1928,130,1839,1784,2353,422,6910,683,806,1031,4318],"class_list":["post-16292","post","type-post","status-publish","format-standard","hentry","category-economics","tag-budget-deficit","tag-china","tag-deutsche-bank","tag-exports","tag-hard-landing","tag-india","tag-meltdown","tag-reuters","tag-trade-deficit","tag-yuan","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16292","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16292"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16292\/revisions"}],"predecessor-version":[{"id":16293,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16292\/revisions\/16293"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16292"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16292"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16292"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}