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6/6 The surge in China's net exports, in other words, is not a sigh of a strong and profitable export sector. If it takes rising debt, continued subsidies, and growing exports in order to prevent a contraction in domestic production, it is simply another way of describing weak domestic demand.

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5/6 When an economy produces far more than it can absorb domestically, it must either export the balance or close down domestic production. Given how high real unemployment is, especially among the young, Beijing has no choice but to force the former, even if this comes at an economic cost.

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4/6 to domestic sales, where businesses are struggling to make any profit at all, and once direct and indirect subsidies are backed out, much of China's exports are net value destroyers for the economy, with the losses capitalized on balance sheets in the form of surging debt.

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3/6 But that is a very poor description of what is actually happening. Yes, net exports are surging, but this isn't a sign of a viable export sector. If the export sector were very profitable, it might make sense to describe it this way, but exports aren't especially profitable except in relation...

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