China: Trade conflict important driver of trade growth – ABN AMRO


Arjen van Dijkhuizen, senior economist at ABN AMRO, suggests that the weakening of Chinese exports and imports since end-2018 is to a large extent driven by the escalation of US-China tensions and related payback from frontloading of trade flows.

Key Quotes

“Looking through the usual volatility at the start of the year (due to annual changes in timing of the Chinese New Year), total Chinese exports in dollars grew by only 0.4% yoy in January-May 2019, compared to almost 13% in the same period of 2018. That fits with the overall weakening of global growth and trade, with the effects of the trade conflict likely starting to hit China-centered global supply chains.”

“Meanwhile, imports in dollars contracted by 3.7% yoy in January-May 2019, compared with a growth of over 21% in the same period of 2018. While it is tempting to attribute the slowdown of imports to a weakening of domestic demand, the trade conflict and its impact on exports is probably even more important as a large part of imports is closely related to exports.”

“Price effects also play a role, given that China imports a lot of commodities and commodity prices have been hit by trade tensions and global growth fears as well.  Looking forward, a further escalation of US-China trade/tech tensions poses even more downside risks to China’s export and import growth.”

 

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD pressured around 1.1200 amid dovish ECB comments

EUR/USD is trading around 1.1200 after ECB officials expressed concern about global growth President Draghi will speak later. Tension is rising toward the Fed decision after US retail sales surprised on Friday.

EUR/USD News

GBP/USD pressured below 1.2600, Conservative contest in focus

GBP/USD is trading below 1.2600, consolidating the losses seen on Friday after US retail sales beat expectations. The Conservative contest is heating up ahead of tomorrow's second vote.

GBP/USD News

USD/JPY: wait-and-see continues ahead of Fed

The dollar consolidates its gains against most rival, and scarce data exacerbates the quietness. USD/JPY bullish above 108.90, bearish below 108.10.

USD/JPY News

Gold: 100-month MA is a level to beat for the bulls

Gold (XAU/USD) is struggling to cut through key technical line which proved a tough nut to crack in 2018. The yellow metal rose to $1,358 on Friday, but the break above the 100-month MA.

Gold News

Gold: Signs of bullish exhaustion ahead of the Fed

Gold's rally seems to have run its course with signs of bullish exhaustion emerging on technical charts ahead of Wednesday's FOMC (Federal Open Market Committee) rate decision.

Read more

Majors

Cryptocurrencies

Signatures