From Bloomberg two days ago:
…”There’s no hope for export demand to recover any time soon,” said Wang Qian, a Hong Kong-based economist at JPMorgan Chase & Co. “How fast imports recover depends on how soon the government’s stimulus package kicks in and creates real demand in major industries.”
Figure 1: Log Chinese exports (blue) and imports (red), and 12 month moving averages (dark blue, dark red). In millions USD, not seasonally averaged. US NBER defined recession dates shaded gray. Source: IMF, International Financial Statistics, updated with newspaper reports, NBER, author’s calculations.
Regarding imports, Willem Thorbecke has pointed out to me that the deviations from trend have been most pronounced for imports for processing, and processed exports. Ordinary imports and exports have been less affected — at least through 2008.
Figure 2: Source: Personal communication from Willem Thorbecke; paper presented at this this conference.
This supports the view that the overall decline in worldwide demand for Chinese exports has thus far driven the declines in Chinese imports, rather than declining domestic Chinese demand. I suspect, however, that over time ordinary imports will decline as well.