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Submitted by Danny on
It seems doubtful to me that an export oriented economy the size of China can sustain a prolonged contraction in export demand(20-25%). I believe the Chinese are buying themselves time with expanded lending and stimulus spending hoping for export demand to recover to pre crisis levels within a relative short period of time, maybe mid 2010. In the meantime they are stockpiling alot of what they produce hoping to be able to unwind their inventories at a later date. It must be very dificult for China in my opinion to target their loose lending and stimulus packages efficiently considering the rapid decline in global trade.