What's going on?

China sold a lot less stuff to the rest of the world than expected in September (tweet this), and that�s bad news for pretty much everyone.

What does this mean?

In dollar terms, Chinese exports dropped 10% from their September 2015 levels � much more than the 3% drop that economists were expecting. That�s bad news for the Chinese economy: exports are positive for economic growth. Fewer exports mean less money is coming into China. It�s also bad, though, for the developed world because it shows that demand is weak from the countries that China typically sells goods to (we�re looking at you, America and Europe). Perhaps the only saving grace is that these month-by-month measurements tend to be quite volatile, so we�ll have to see if the negative trend persists before drawing any major conclusions.

Why should I care?

The bigger picture: International trade isn�t growing like it used to.

Last month, the World Trade Organization warned that global trade would grow more slowly this year than in any year since the 2008 financial crisis – and China�s trade data is consistent with that view. International trade is both an indicator and a driver of global economic growth (in other words, this data is more evidence of slowing global growth).



For the markets: China�s government is weakening its currency, at least partly in order to stop exports from falling even more.

The Chinese government essentially controls the value of China�s currency. Recently, it has gradually allowed the yuan to fall versus the currencies of its main trading partners (especially the dollar). This supports Chinese exports by making goods cheaper for international buyers. Without a weakened yuan, exports likely would have dropped even further. The problem is that a falling currency causes people and businesses to try to move money out of the country (and into currency�s that aren�t falling in value). That selling pressure makes the yuan more vulnerable to a big devaluation (which would likely be harmful to the global economy).