Japan exports drop by half, can China be far behind?

If there was any question about who is getting the worst of the global recession, that speculation can be put to rest. In February, Japan's exports dropped 49 percent.

According to the Financial Times, "The decline in exports was the steepest since 1957 and worse than most economists had anticipated." What an understatement. By many measures, Japan is the second largest economy in the world.

Japan's exports to the U.S. were down almost 58 percent. Can China be far behind? Can the Chinese economy can do as well as its central government says it can? America is the largest importer of China's goods. Can the profile of its relationship with the U.S. be entirely different from Japan's? Can China pull an economic rabbit out of its hat when Japan cannot?

The answers are almost certainly "no." China's economy may be slowing much faster than many analysts have predicted. China's government says its GDP will grow by 8 percent this year, but with factories closing because of lack of demand for goods outside its borders, it is hard to see how that can happen. China has bet its expansion on a $500 billion stimulus package, but in a nation so large that level of government spending is almost certainly insufficient.

Japan's numbers are awful all by themselves, but they say nearly as much about China's prospects as they do Japan's.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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