The Chinese industrial machine is running on overdrive while the local consumer remains trapped in a deflationary hole
Notayesmanseconomics notes industrial input prices jumped 5.8 percent year on year while consumer goods prices fell 0.8 percent
This is a classic mercantilist trap where the export machine is hyper-efficient but the internal economy is hollow
Beijing is trying to rebalance toward consumption but they are failing
Lower house prices are doing the exact opposite of what the central planners wanted
The housing bubble burst is actively sucking the life out of domestic demand despite desperate stimulus attempts
China has successfully offloaded its excess industrial capacity onto the world while keeping its own people on a starvation diet of spending
It is not rebalancing
It is just a modern version of the Japanese stagnation model but with more iron and less sushi