What worries me the most? The possibility that the sharp y/y fall in imports doesn’t just reflect a fall in imported components or a fall in commodity prices, but rather a major deceleration in China’s domestic economy....At a time when the world is short demand, China seems to be subtracting from global demand not adding to it. The best solution: an absolutely enormous domestic stimulus in China.
A massive stimulus in the United States is probably necessary, but it's still a dicey proposition since we're running a big trade deficit and need to curtail our domestic consumption in the long run. But China is running a big trade surplus, which makes it unproblematic for them to increase domestic consumption, and their economic growth last quarter was perilously close to zero. They're the ones who really need to stimulate their economy. If the Chinese economy tanks, the rest of the world will get dragged down even further with it.