China's trade healthy

<p>Kia ora,</p><p>Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news </p><p>China's export trade boom is holding up well.</p><p>But first, American <a href="https://www.federalreserve.gov/releases/g19/HIST/cc_hist_sa_levels.html" target="_blank"><strong>consumer credit</strong></a> grew by just +US$19 bln in April from March and less than expected. Compared with April 2019, it was +4.2% higher (with the 2020 comparison essentially meaningless).</p><p>Meanwhile, Janet Yellen has been pointing out that the enormous "US$4 tln Biden Budget" is over a ten year timeframe and involves increased spending of about US$400 bln per year. <a href="https://www.bloomberg.com/news/articles/2021-06-06/yellen-says-higher-interest-rates-would-be-plus-for-u-s-fed" target="_blank"><strong>She said</strong></a> that while that may put some upward pressure on inflation, in terms of the size of the US economy that will be relatively minor.</p><p>China reported a <a href="http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/3700032/index.html" target="_blank"><strong>May trade surplus</strong></a> of +US$45.5 bln which was slightly lower than expected as imports grew faster than exports. Their <a href="http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/3699985/index.html" target="_blank"><strong>surplus with the USA</strong></a> was +US$31.8 bln as the improving American economy swelled it. It's deficit with Australia was -US$8.7 bln as the new "iron ore" is natural gas. Its May deficit with New Zealand was -US$830 mln. Of course, year-on-year comparisons suffer from the pandemic base issue. So it is best to compare with <a href="http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/2486655/index.html" target="_blank"><strong>May 2019</strong></a>. In that basis, China's surplus is +9% higher and the surplus with the USA