Today the economic calendar has witnessed some remarkable Chinese indicators which insured the recovery of the Chinese economy and the effectiveness of its $585 billion stimulus package. The nation released nine key economic data for November.

The most remarkable data among those indicators was the Retail sales which grew almost 16% but on the long run. As it was released to be 15.8% but the previous was 16.2%. The New loans data were up 29%, as it was read at 295B while the previously reported one was at 253B. Factory output was up over 19%.

Moving to the CPI the release came better than expected at 0.6% while expectations were at 0.5%. The previously reported release was at -0.5% which is considered to be a huge shift in expectations.

The drop in exports from China was small in November, barely more than 1%. It is curious that the figure is so powerful since the recovery in the West is still in an early and tentative stage. Imports were up almost 27% which makes sense because the Chinese consumer has easy access to credit as a by-product of the stimulus program.

It is still not certain where all the goods produced in Chinese factories will go and that is the most important concern that the industrial output data raises. China still faces the prospect of having stagnant markets to buy its production, particularly in the large developed nations which include most EU countries, the US, UK, and Japan.

China may use unethical ways to sell these goods all over the world and might flood the world’s markets with these goods. It may find that the only way to clear the surplus of industrial output from its ports is to sharply cut prices on the goods it sends to the West.

That could be the trigger for a major series of trade dispute as weak economies try to protect their own industries from a flood of products priced so low that consumers and businesses find them almost irresistible. Goods made in Western factories with higher labor costs could be frozen out of the market.