Well… when we go figure, we figure there’s something fishy about it. In fact, we figure it’s a fraud.

In America, the bear market bounce took a little jig downwards yesterday. Stocks – measured by the Dow – fell 96 points. Oil fell below $70. The dollar and gold remained almost unchanged.

But China’s revved up so hot she seems likely to throw a rod. We’ve been telling our Dear Readers to stand clear.

At least, that’s the case with the Chinese stock market. It’s a bubble. And it’s getting ready to pop.

As for the economy… we figure it’s a fraud…

Chinese officials have a funny way of counting. When products are shipped from the factory, for example, they are counted as ‘sales’ even though no one may actually buy them.

There are some other ways of keeping score that tend to tilt the game in China’s favour – at least, on paper. When you add up all the scores – it shows China a big winner. But by the end of the day, it isn’t at all clear that China’s economy is growing at such a breakneck speed. In fact, it isn’t clear that China is really growing at all – not in a genuine and helpful way.

And here… perhaps we should pause. We are about to tell you that China is a scam. It’s not really becoming more prosperous. But before we do, we have to explain what prosperity really is.

Do you remember the Bubble Years? Of course you do. They just ended scarcely 24 months ago. Well, during those years we were told that we were getting richer. Two forms of evidence were presented – one statistical… the other observational. The numbers told us that GDP was growing. Since economists figure GDP grow is the same as prosperity… they thought Americans were getting richer.

There was also the evidence available to anyone with eyes. You could look at any driveway; there you would find two or three cars – new cars… big cars. And behind them was a brand new McMansion… Bubble Era vintage…

Yet, both forms of evidence were misleading. Americans were spending. The spending showed up as GDP growth. The faster they spent, the more new cars and new houses they had too.

But they were not creating wealth… they were consuming it. They were spending money they hadn’t even earned yet. They were not only consuming existing wealth, in other words, they were consuming wealth that hadn’t even come into being… tomorrow’s wealth. You couldn’t see this happening by looking at the GDP numbers; instead you had to look at balance sheets. And even then, you needed to look at them with a suspicious eye.

On the one side, debt was clearly swelling up; it doubled during the 2001-2007 period. On the other, assets were swelling up too. But the assets were of the overpriced, bubble-era variety… houses and stocks that were subject to easy correction. And when the correction came, assets declined… and debt grew heavier and heavier. Now, Americans have twice as much debt… and their assets are back to where they were 10 years before. Net result: impoverishment, not wealth.

Consuming wealth is not the way to get rich. It’s the way to get poor. But it would take someone without a Ph.D. in economics to see such a simple and obvious truth. Given a fellow a computer and an advanced degree in economics and he’s ready to believe anything…

Yes, dear reader, in His majesterial wisdom, God – or whatever wiseacre created this system – set up something so subtle and complex that it is beyond the reach of human tinkering. That’s why the meddlers always make things worse. That’s how they put the ‘great’ into the depression of the ‘30s – by interfering with the markets’ natural corrective mechanisms. And now these simpletons think they can stop the correction underway since ’07 – with stimulus, bailouts, and boondoggles.

Yes, they admit, it was excess credit that put American consumers into such a jamb. But, heck, now we’ll let the government do the borrowing. The government will make up for the demand that has been removed from the private sector. The private sector is paying down debt at roughly $1 trillion per year. And now the public sector is adding debt at roughly $1 trillion per year. That ought to do it, right?

Ha… ha… yes… why not… And while we’re at it, let’s round off pi to a whole number so it will be easier for school kids to remember.

But wait a minute… we’re talking about China, not the US. And we’re talking about Chinese meddlers, not the American variety. And we’re talking about the Chinese depression… not the depression in the advanced economies.

But wait… you’re probably wondering… ‘What Chinese depression? China is booming… isn’t it?’ Well, read on…

Here’s a question for you: if China were really growing at 8% per year, how come its electricity consumption is going down?

We’ll provide an answer. Because the Chinese bureaucrats can jiggle and jive the numbers for employment, GDP, and inflation. But the number of kilowatt hours consumed in China is just a number. It is not computed. It is not seasonally adjusted. It is not tortured by statisticians nor tormented by economists. It is just a number. And that number is a smaller number than it used to be.

Oh, and here’s another number. China’s exports for July were down 22% from the year before. Here’s another question; how can an export led economy grow when its exports are collapsing?

Again, we have an answer: when it is not really growing.

China is growing, say the meddlers, because meddling works. China is spending $586 billion (proportionally nearly 3 times as much as the US) to keep its economy booming. The program must be working, say the economists, because China’s economy is still growing.

But is it? Most of the money is spent on infrastructure. The Chinese are doing what the Japanese did before them. Japan bailed out its banks and spent trillions on infrastructure. There were years when little Japan was pouring much more cement than the entire USA – channeling rivers, building bridges to nowhere, and creating highways for no one. What did they get for their money? Well, you could say they got a lot of infrastructure… and the most cemented–up country on the planet. Is that a good thing? We don’t know. But one thing they didn’t get was durable economic growth.

Why not? The easy answer is because an economic system is too sophisticated to yield to these ham fisted interveners. Another way to look at it is because the economy had already spent too much… creating too much capacity. Adding infrastructure that could handle more capacity was not a solution.

But heck… it’s summer. And in the sum… sum… summertime, we’re not going to criticize our fellow man. Instead, we’re just going to laugh at him.

In China, for example, the government’s stimulatory programs are having the same flaccid results they got in Japan. Prices are going down. The Chinese feds are trying to get people to spend more money – just as they did in Japan. But people do not spend more when prices are falling. They wait for a better deal. And as they wait, consumer demand falls… forcing prices down further. Japan has gone through almost two decades of on-again, off-again consumer price deflation. Now it’s China’s turn. Consumer prices in China have been going down for the last 6 months… and are now reported falling at a 1.8% annual rate.

How could prices be going down in a booming economy? Well, because the economy isn’t booming. Instead, it’s burdened with overcapacity – just like Japan’s. And like Japan’s it is probably doomed to go through a long period of re-adjustment… before a durable recovery can begin.

Source: China is a Scam

A quick glance at the scoreboard proves my criticism was spot-on…

While the S&P 500 Index slumped 38.5% in 2008, 30 countries witnessed drops of 50% or more. Even more telling, the poster children for the decoupling trade: Brazil (-41.2%), Russia (-72.4%), India (-52.45%) and China (-65.39%) didn’t escape punishment either, despite wild predictions they would…

Clearly, the old adage still applies, “When the United States sneezes, the rest of the world catches a cold.” (Or in some cases, like Russia, they get pneumonia.)

So why resurrect the past? Because decoupling diehards won’t let this junk science die. And sadly, another warning is in order…

Decoupling 2.0 – Redefining The Theory

On the back of an impressive rebound in emerging markets this year, the decoupling chatter is back. Only this time, followers are calling it “Decoupling 2.0.” And they’ve redefined their theory…

As The Economist reveals, “Decoupling 2.0 is a narrower phenomenon, confined to a few of the biggest, and least indebted, emerging economies.” Ones with “strong domestic markets and prudent macroeconomic policies.”

Funny. I read that “redefinition” and think how badly some pundits want decoupling to work out.

It’s still the same farce, however.

• You see, globalization – an undeniable, decades-old, economic force – created one quantum entanglement.
• World markets are inextricably tied together in knots, whether we want them to be or not.
• And if they can ever be untangled, it will take years (likely decades), not a few quarters.

So, as the Decoupling 2.0 banter picks up, let me offer up a dissenting voice – and warn you.

First, don’t be mislead by the headlines…

• Yes, Chinese stocks are up 44.6% in 2009.
• Yes, Brazil rebounded 39.7%.
• Yes, India staged a 51.6% comeback.
• Yes, Russia came roaring back 72.1%.
• And yes, the United States only mustered a pathetic 0.22% gain.
• But nothing’s really changed.

The United States remains the engine of economic growth. How else do you explain the fact that the equity markets continue to move in lockstep?

As you can see in the chart below, some of the BRIC nations started to rebound sooner, but they sold off in February, just like the United States. And they didn’t really gain momentum until after signs that the U.S. economy would fight another day materialized.

Chart Source: Bespoke Investment Group

Decoupling Advocates: Countering The Obvious With Nonsense…

Decoupling adherents will counter this evidence, saying the equity markets might still be coupled, but the underlying economies most certainly are not. Nonsense.

If an economy is doing well that means businesses are doing well. And if businesses are doing well – and most are publicly traded – stock markets will be doing well. You can’t separate the two.

That leads me to the second part of my warning. Whatever you do, don’t abandon your U.S. investments or significantly overweight your portfolios to these “decoupled” international markets.

If you did so the last time, your portfolio got hammered. In fact, if you moved all your investments into China or Russia at the start of 2008, like some investors I know, you’re still worse off than the patriotic fellow that invested in nothing but U.S. stocks.

A hypothetical $100,000 portfolio of U.S. stocks is now worth $61,655, compared to $50,046 had you held all China stocks, and $47,500 had you had nothing but exposure to Russian stocks.

While Decoupling May Be A Farce – Don’t Ignore Emerging Markets

Let me be clear, although decoupling is a farce, that doesn’t mean we should ignore international and emerging markets altogether. That would be foolish. These markets lay claim to stronger domestic growth and more options (higher interest rates and billions in foreign reserves) to stimulate further growth.

What I am recommending, instead, is that you capitalize on these strengths in a more intelligent manner. Instead of going “all-in” so to speak, place a more reasonable wager. Specifically, stick to the tried principles of asset allocation. After all, the theory behind it won a Nobel Prize. Meanwhile, Decoupling 2.0 isn’t even legitimate enough to garner a nomination.

So instead of plowing all your money into international stocks, only allocate a portion. At The Oxford Club we recommend a 30% allocation to international stocks. That’s just the right amount of exposure to profit, without taking unnecessary risk.

In terms of specific investments, I recommend the low-cost, no-hassle, diversified, indexing approach.

• Either the iShares MSCI EAFE Index (AMEX: EFA), which holds positions in 838 companies.
• Or the iShares MSCI Emerging Markets ETF (AMEX: EEM), which holds positions in 340 companies.
• If you want a more concentrated, high profit potential pick, hire a professional. Specifically Mark Mobius and the Templeton Emerging Markets Fund (NYSE: EMF). No one can touch his 40-year track record in emerging markets, even recently. Since the March 9 bottom, his closed-end fund is up 65%.

Good investing,

Louis Basenese

Source: Decoupling Is Still Dead And Here’s The Proof

This from Russell:

I usually don’t spend a lot of time touting one stock. But there is one stock that fascinates me. It’s the Chinese stock, BYD. BYD is run by CEO Wang Chuanfu who, according to Charlie Munger, Warren Buffett’s right-hand man, is a combination of Thomas Edison and Jack Welch. The company is only 14 years old and is already bringing in $4 billion in sales.

BYD is now the world’s leading manufacturer of batteries (they supply the batteries for Apple). BYD is now moving into the manufacturing of plug-in cars. I think in view of the company’s history and capabilities, that BYD will be successful and a coming huge factor in the auto business.

Warren Buffett and Richard Russell are buying BYD, maybe you should too…

In January 2008, Beijing introduced new workplace legislation called the Labor Contract Law. Its objective was to ensure job security by making cursory dismissals more difficult. The Labor Contract Law comes in on heels of anti-discrimination labor laws instituted last year, which streamlined the process for workers to file grievances against their employers.

As a result, labor disputes have surged by approximately 119% since last year as workers exercise their new rights.

While the global recession throws a monkey wrench into China’s manufacturing engine, the Labor Contract law could compound the crisis by making labor in China more expensive. In fact, there is evidence that factories are already moving to Cambodia, Vietnam and Bangladesh, which promote owner-friendly labor laws.

If in fact this migration turns into a stampede, China’s entire economy could suffer longer term damage than anticipated. The higher salaries kicked in at a time when China’s manufacturing sector contracted for the fifth consecutive month in December, according to the CLSA China Purchasing Managers Index.

In the first 10 months of 2008, 15,661 enterprises in Guangdong, the manufacturing-heavy southern province, shut down. China’s manufacturing shrank for a third month in December as export demand fell, suggesting a long-drawn-out economic slump. Manufacturing comprises about 40% of China’s economic output. It comes as no surprise, therefore, that the World Bank forecast in November of last year China’s economic growth may slow down to 7.5% in 2009, the lowest since 1990.

While many of the closures are certainly tied to lower exports, factory owners are simply padlocking their doors rather than conform to the more restrictive and expensive labor laws – often absconding with the employees’ back pay.

The labor laws also sanction the once-unthinkable notion of labor unions in China. All employees are now eligible to joint the China Federation of Trade Unions (ACFTU), which is controlled by the Communist Party and has around 170 million members. The ACFTU is legally entitled to negotiate salaries, working hours, holidays, and benefits (although they are now allowed to strike). By the end of 2006, about 50,000 foreign companies in China entered into collective contracts and the ACFTU has said its goal to unionize nearly all foreign companies in the coming years.

While unionization and labor laws are long overdue for workers, they also create a new investment climate in China that could reduce windfall profits across the entire economy.

The news organ of the China’s Communist Party cited the China Securities Journal as saying that the global financial crisis will continue to exert pressure on China’s economic health.

The forecast was produced at the recent Central Economic Working Conference. The agenda of the meeting was to set the economic keynote for 2009 as “maintaining growth, boosting domestic demands and adjusting the economic structure,” the People’s Daily reported.

The annual conference is held from Dec. 8 to Dec.10. It helps Beijing set economic goals and reforms for the coming year. Six new challenges were identified for next year in order to maintain growth for the Chinese economy.

First, there was recognition by members of the conference that the international financial crisis will continue batter the country.

Second, both domestic inflation and deflation both domestically and abroad will make planning difficult.

Third, the stock market and real-estate market in China will continue to fluctuate and the possibility of real estate prices dropping will be very high.

Fourth, the living conditions for small and medium-sized enterprises will further deteriorate.

Fifth, the employment situation will continue to deteriorate.

And sixth, the conference expressed difficulty in trying to maintain a balanced national budget.

Some areas of investment for Beijing include agricultural production, employment, social welfare, education, health care, energy conservation and emissions reduction, technical innovation, manufacturing efficiencies and subsidies for entrepreneurs.

The government will also expand social services for the urban and rural poor.

As we’ve seen, China is now a bellwether for the global economy. Based on the results of the conference, investors can expect more of the same in 2009.

An article in today’s China Daily reported that the country’s dairy exports “have ground to a halt” in the wake of the tainted-milk scandal.

The latest numbers from China’s General Administration of Customs (GAC) showed that only 1,036 tons of dairy products were exported in October 2008, down 92% year-on-year. From January to September, the monthly average export of dairy products was 12,000 tons.

Once again, China is looking to the U.S. to rescue another of its exports. With the US-China Strategic Economic Dialogue (SED) on economic, trade and food safety issues slated to begin on Thursday, China is hoping it would pave the way for the Federal Drug Administration to accept the results of a Chinese agency that tests food safety.

If so, investors could see the move as fueling a rise in commodity prices such as grain, poultry and dairy.

After the melamine milk scandal in China, the FDA issued an alert on Chinese dairy products, slamming the door on many Chinese food exporters.

According to the China Daily, Guangzhou is one of the hardest hit areas, exporting only 35 tons of dairy products in October, down 94% year-on-year.

Liang Feng Food Group in Jiangsu province, which mainly supplies milk, milk chocolates, biscuits and cream candies, is among the companies badly hit by the melamine scandal and the FDA order.

So far, powdered milk laced with melamine has killed six small children in China and affected thousands of others. It causes kidney and liver disorders.

Melamine is an industrial product used to make plastics and glue. But it was an open secret that the chemical was added to agricultural products to thin products and boots protein claims.

More than 20 countries banned Chinese food products, including multinationals such as Cadbury’s, Heinz, Nestle and Unilever.

China’s promiscuous use of melamine came to light about two years ago when it was blamed for killing dogs and cats in the U.S. At the time, China promised to tighten food regulations, but until the milk scandal it appears that little had been done.

In the meantime, this is another indicator that the global food shortage will continue for the near future. On paper, this should help drive up some commodity prices. Whether or not this crimp in the food-chain supply is enough to overpower the general economic malaise remains to be seen.

That said, China’s economy is still on track to post impressive growth during a global financial crisis. Unfortunately, this growth won’t meet initial forecasts.

In its latest quarterly report, the World Bank revised China’s growth downward to 7.5% from an earlier projection of 9.2%. The change reflects the World Bank’s view that Beijing isn’t doing enough to shift the country’s reliance away from waning exports to more robust domestic growth.

The Chinese economy grew by 11.9% 2007, in what appears to be the peak in double-digit expansion since 2002. Now facing single-digit prospects in 2009, China’s slower-than-expected advance call into question the global economy overall.

While most pundits see diminished U.S. consumer spending impacting China’s exports, emerging markets worldwide contributed significantly to the export boom of the past few years.

Latin America, Eastern Europe, Russia, Southeast Asia and other regions able to cash in on skyrocketing prices of fossil fuels, metals and grains are themselves suffering from the market turmoil. As commodity prices plummet, the expanding middle classes of these emerging nations begin to contract – reducing spending on consumer goods coming into their countries from China.

Reading between the lines, the World Bank also seems to be saying that the worldwide recession will be here for years to come – further hampering China’s ability to stimulate its economy.

The World Bank’s report also challenges the effectiveness of China’s new $586 billion stimulus package announced earlier this month. The package called for a massive national infrastructure build-out. Given the World Bank’s view of China’s over-reliance on exports, the new stimulus plan could ultimately prove to be a “bridge to nowhere” with no substantial growth for the long-term returns that emerging markets count on for these massive projects.

Obviously, the much ballyhooed stimulus plan isn’t enough to carry the day in China.

The latest rate cut, to 5.58% for loans and 2.52% for deposits, was the fourth cut since September.

Now, potentially like the U.S., China’s lower growth rate next year would rely heavily on higher public spending, according to the World Bank report. This could be a harbinger of how the incoming Obama administration would attempt to fix the U.S. economy based on recent news stories.

Taking into account China’s stimulus plan and other domestic projects, Beijing’s spending would add 4 percentage points in 2009 to the economy compared with 1.5 percentage points in 2007.

Another drain on China’s coffers could be subsidies for the increasing ranks of unemployed factory workers. Shrinking exports mean lower demand for products.

The government has announced new measures to support the economy, out of fear that the crisis and growing unemployment could cause increased public protests, according to AsiaNews.

Facing an epidemic of protests, Public Safety minister Meng Jianzhu warned that local regulators could face “social problems affecting stability.” In particular, there is the danger that the slowdown in exports will cause widespread unemployment.

Gunagzhou province provides a snapshot of where unemployment is heading.

A recent Chinese media report cited data from the Guangzhou Train Station, which showed in early October that the number of departing passengers compared to the same period last year had increased by 128,000.

Guangzhou is one of China’s largest manufacturing export centers.

“I woke up this morning and everything was green – not the trees but the gains on my emerging market portfolio.”

Up, up, up, with the exception of the iShares MSCI Turkey Invest Mkt Index (NYSE:TUR), which was down 5.67%.

Some of the highlights include the HANG SENG INDEX (^HSI) up 12.82%. The RTSI INDEX (RTS.RS) jumped 18.2% after Putin approved nearly $10 billion in bailout loans – most of them going to his billionaire pals who made extremely bad bets on the markets.

The JAKARTA COMPOSITE INDEX (^JKSE) increased 5.41%. The TSEC weighted index (^TWII) was up 6.21%. And the IBOVESPA SAO PAULO (^BVSP) market gained 5.94% after taking a tremendous beating.

Does this mean it’s time to get back into emerging markets?

Probably not.

But it does indicate some rationalization between the skyrocketing prices during the so-called commodities supercycle and the new everyday reality of emerging nations facing a raw reality head-on.

Maybe you can call it sort of a fiscal post-pubescent coming of age, where enormous subsidies and reserves from natural resources will give away to the promise of responsible stewardship by business and government.

Of course, no one really enjoys being responsible for very long, and the whole stupendous spectacle will cycle up all over again.

That said, we should really be looking to China as the bellwether for a sustained emerging market rally. The country is now dealing with the backlash to a global credit crunch, post-Olympic slump and credit and currency problems.

Inevitably, China will pull itself up by the bootstraps and continue the march toward its own economic Manifest Destiny.

Naturally, an upswing in oil, natural gas and metals will also help determine an emerging-market recovery.

In the meantime, though, we have to follow the credit, because that’s what these countries need to normalize their economic progress.

The International Monetary Fund (IMF) will make available as much as $100 billion to countries battered by the financial crisis.

During the past few years, emerging markets have avoided the IMF because of restrictions that are imposed with the loans. These often include budget cuts and interest-rate increases. When these countries get in bed with the IMF, fiscal responsibility is the first order of business.

Countries such as Brazil, Mexico and countries of the former Soviet Union would be likely candidates for IMF infusions.

In the end, don’t get your hopes up high for any emerging market bubbles in the near term. On the other hand, if you’re looking for a return to long-term fiscal responsibility (and the inevitable bubble) keep on your eye on these up-and-comers.

On September 30th, I talked to you about Brazil, Russia, India and China. I said that “it’s hard to talk about the BRICs as a whole. But this one thing is true. They’re not immune to the world’s economic problems. And even Brazil will suffer if the U.S. can’t solve the credit crisis.”

That was just three weeks ago. Since then, we’ve had Iceland needing a big loan from Russia in order to avoid going bankrupt. We’ve seen bailouts of huge banks like USB of Switzerland and Royal Bank of Scotland. Asia finally joined the bailout parade with emergency measures to provide funding to ailing banks when needed.

These countries are getting hit hard where it hurts the most: exports and commodity prices. Some countries like Hungary, the Baltic states and South Africa were already in trouble, thanks to large external debts and narrow revenue bases. Now, their economies are on life support.

As you can see, as bad as the Dow has performed over the last six months, emerging markets (the blue line – represented by the iShares Emerging Markets Index) have done much worse. They’ve lost 50 percent of their value and their plunge since mid-September has been much more dramatic than the Dow’s.

But even if they spend a chunk of it, will it be enough? I posed the same question to you three weeks ago. The only difference now is that the whole world seems to be looking to China to save them.

Here’s what the Washington Post said on Saturday: “Perhaps the only major economy that remains robust despite the crisis is China.

“While it is suffering from a collapse of its stock and real estate markets and a decrease in demand for its exports, many economists continue to argue that the global slowdown may actually be beneficial because China’s economy had been in danger of overheating.

“Pakistani President Asif Ali Zardari arrived in China Tuesday … ‘China is the future of the world,’ Zardari said, according to the official state news agency. ‘A strong China means a strong Pakistan.’”

Robust? Really? We’re going to find out if China’s economy is capable of going one way (up) while its stock market, real estate market and exports go the other way (down). But it’s hard to imagine hundreds of companies in China not going under as export sales dry up … hard to imagine China growing as the rest of the world’s markets shrink … and hard to imagine China’s economic growth not falling below eight percent a year for the following few quarters.

China saving the world? I don’t think so. If we’re depending on China to get us out of this mess, we’ve already lost.

Source: No Refuge in Emerging Markets

Beijing is now focusing on helping homeowners buy and keep their properties in the face a global real-estate meltdown.

Whether or not this is enough to sustain some kind of rally on the Hang Seng Index (HSI:HKG), which has dropped 51.4% over the past 52 weeks, is truly doubtful.

Beijing’s maneuver comes at a time when Asian stocks slumped to their lowest since December 2004 on fears that government bailouts may not be enough to prevent a worldwide recession. And with China’s reliance on exports to the West, concerns run deep on the country’s ability to sustain its blistering rate of growth.

Despite worries, China’s commercial real-estate market sees no signs of letting up.

In July, Merrill Lynch raised China’s three-year infrastructure projections from $400 billion to $725 billion – an increase of 81.2%.

Now China must focus on the cash flow of its expanding middle class to ensure that they keep spending.

The China Daily reported that up to 18 Chinese cities have unveiled plans to boost their property market, which have seen at least four months of consecutive drops in housing prices.

What Beijing has in store is plan that could lower property taxes and relax lending rules – injecting more liquidity into the economy.

Over the years, home ownership in China has taken off in part due to the Chinese infatuation with fixed assets. Tower apartment complexes opened a whole new world to people who rode the updraft up the Chinese economic miracle.

China’s residential real estate has been on a tear since 2000, mirroring the boom in the U.S. and Europe. Real estate purchases were part of a luxury spending spree that also included cars, jewelry and travel.

To prevent run-away inflation, Beijing introduced higher taxes and related fees in 2007. In addition, it tried to discourage speculation by imposing triple-digit mortgage rates on second homes.

Now the country is seeing real prices drop as much as 72% year-over-year in some of the most desirable regions. As values decline, real estate no longer becomes a reliable fixed asset investment – the same theme that now has most markets everywhere in the throes of a recession.

Whether or not this is enough to turn around China’s stock markets remains doubtful. There may be a slight uptick, but global market forces are conspiring to keep China tied to the rest of the world.