China: Better than expected trade data could be distorted – ABN AMRO
|According to Arjen van Dijkhuizen, senior economist at ABN AMRO, China’s latest trade data came has come in better than expected, but after remaining solid during January-October 2018, trade data started weakening since November, and poor December data added to fears of a global slowdown.
Key Quotes
“One should not attribute the drop in Chinese imports fully to the slowing of domestic demand. Various special factors are at play: the slowing of exports (as a big chunk of Chinese imports is export-related), the effect of import tariffs implemented last year, payback from trade conflict related frontloading, lower commodity prices and base effects from strong trade numbers end 2017.”
“Meanwhile, the January trade data came in much better than expected. Import growth remained negative (-1.5% yoy), but much less than expected (-10.2% yoy) and in comparison to December (-7.6%). On a mom basis, imports rose by 8.7% in January.”
“Meanwhile, export growth was in positive territory again (+9.1% yoy, versus consensus -3.3% and December -4.4%), taking away some of the fears of a sharp slowdown in external demand. That said, China’s monthly trade data are notoriously volatile, particularly at the start of the year reflecting to year-to-year changes in the timing of China’s New Year holiday break. That means that one should be careful in drawing sharp conclusions from monthly trade figures.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.