GEOFINANCE/ China-USA: A new war that is hitting the EU

Thus, China has confirmed their intention to help Europe support its debt. Despite the fact that this is the fifth time in a year Beijing gives assurances to that effect, which are then never followed by action. On the contrary, the Chinese banks are selling their exposures on the Eurozone. So, what is the state of health of the Asian giant? The bad news continues to flood in about the Chinese economy.

China’s M1 money supply has reached its lowest level in ten years now, their consumption of electricity fell by 7.5% in January compared to the year before, and every time there has been a decrease in the annual consumption of electricity, there has been a decrease in China's industrial output. Do you remember the data on the Baltic Dry Index, at its lowest since the crisis of the Lehman Brothers, and which can signal a serious crisis of exports and sea shipments (even without considering the overcapacity was created by the boom in new vessels between 2005 and 2008)? Well, there's more.

Lloyd's List, a specialized indicator of the shipping industry, clearly tells us that the container traffic in the port of Shanghai, the world's largest, fell by 100 thousand units in January compared to the year before, a decrease of 4%. The volume, meanwhile, has fallen by over one million tons. Of course, the holidays for Chinese New Year could have had an influence on these figures, but the slowdown in operations and the decline in volume at the port of Shanghai have gone on for months. "The Chinese shipping market is facing tough challenges and the situation will tend to worsen throughout this year," the Shanghai International Shipping Institute confirms. But which is the sector that hit the Chinese port volume the hardest? The Asia-Europe route. Figures released last week by the International Monetary Fund speak the language of "a clear and present danger for China coming from Europe, something that could take off 4 percentage points of growth if the crisis in the Eurozone worsens and culminates in a severe recession. If this negative scenario were to turn into reality, China would have to respond with the adoption of a significant tax package".