This undoubtedly understates, or rather lags, the damage. The biggest hint comes from neighbouring countries. South Korea and Taiwan, the third and fourth biggest importers to China last year, saw exports in December plunge 17 per cent and 42 per cent respectively. Many of these shipments contain parts which China processes or assembles and then ships on to the rest of the world. If Chinese imports of such components are down by around a third, you can bet a more serious export slump will follow soon. Prices are also falling too. Chinese shipment prices to the US fell 0.6 per cent month-on-month in November, according to US data. Morgan Stanley calculates the Chinese export contraction, measured in local currency, is around 10 per cent.
Exports account for roughly one-third of China's economic output, although measured by value-added it is closer to a tenth. Thus any upcoming steeper fall would crimp economic growth. Already officials are warning that an 8 per cent economic growth rate – the level seen as necessary to provide sufficient jobs and thus preserve social stability – could be a stretch this year. Some private sector economists are pencilling in as little as 5 per cent, about half the recent run-rate. At these levels all sorts of risks arise: increasing job losses, more bad debts in the banking system, all crowned with social unrest. That leaves an awful lot riding on Beijing's stimulus package and monetary policy. It also increases the odds of an ugly quarter or two before the effects of that extra spending kick in.