Is China more important to us than we are?

While investors shook off Friday's dismal employment numbers, a surprise trade surplus from China threatens to rattle the market.

By TheStreet Staff Aug 10, 2010 8:41AM

jim cramerBy Jim Cramer, TheStreet

 

Can the Retail HLDRs Trust (RTH), the retail ETF, hold on against the pending onslaught I see coming?

 

We got a Chinese trade surplus surprise last night that makes the yuan likely to appreciate again. That was the precipitant -- the big, bad event -- that drove RTH down to levels from which it only recently recovered.

 

It particularly affected the apparel makers -- Ralph Lauren (RL), Jones (JNY), VF Corp (VFC) and Phillips-Van Heusen (PVH) -- because the "smart money" decided that China is the only place these companies import from.

 

Betting against them failed. The impact wasn't that severe, as the yuan didn't appreciate much at all, and these apparel companies can shift to factories in other countries far more easily than people realize.

Still, anything negative about China, anything that upsets the "soft landing" dream scenario, is enough to rattle an overbought market.

 

What would be AMAZING to me is if China's surplus is now more impactful than our own dismal employment number, which kept our market down for all of about four hours on Friday.

 

Could China be more important to us than, well, us?

 

At this point, given how dismal things are in the U.S. and how hated Washington is by both Democrats and Republicans at the money firms around the country, the answer is YES. Because China is a capitalist country bent on putting people to work hand in hand with business.

 

I am not sure what we are anymore, but it seems to be the exact opposite of what they are.

 

At the time of publication, Cramer held no positions in the stocks mentioned.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

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