Chinese trade balance: The worst is over? – UOB


Economist Ho Woei Chen, CFA, at UOB Group assessed the latest Chinese trade balance figures.

Key Quotes

“China’s trade numbers rebounded strongly in Dec in signs that global trade weakness may have bottomed out amidst the trade truce between US and China. The recovery was also partly due to a low base effect.”

“In USD terms, exports rose 7.6% y/y in Dec, well above consensus forecast of 2.9% y/y (Nov: -1.3% y/y) and was the first expansion recorded in five months. Imports surged 16.3% y/y in Dec (Nov: +0.3% y/y) to top consensus forecast of 9.6% y/y. The trade surplus widened to US$46.79 bn in Dec from US$38.73bn in Nov, highest in six months.”

“Overall for 2019, China recorded export and import growth of +0.5% and -2.8% compared to +9.9% and +15.8% in 2018 respectively. The contraction in annual imports was the first since 2016, reflecting the slowdown in the economy. Total trade surplus rose to US$421.51bn in 2019 from US$350.95bn in 2018, the first annual increase after falling in the last three years. Meanwhile, China’s trade surplus with the US narrowed to US$295.43bn in 2019 from US$324.45bn in 2018, which could ease some concerns from US on the sustainability of the trade imbalances.”

With the expected signing of the Phase One US-China trade deal, tensions between the two countries are not expected to re-escalate in the near-term, giving room for optimism that we may have seen the worst in China’s trade numbers.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD pressured under 1.11 amid virus fears, ahead of the ECB

EUR/USD is trading below 1.11, under pressure as fears of the coronavirus weigh on markets. The ECB is set to leave rates unchanged and provide views about the current economic environment. 

EUR/USD News

GBP/USD consolidates gains above 1.31 after parliament seals Brexit

GBP/USD is trading above 1.31, consolidating its gains. The House of Lords gave its final seal to Brexit. Speculation ahead of the BOE's decision continues after upbeat data diminished chances for an imminent move.

GBP/USD News

Forex Today: Coronavirus fears spread and weigh on markets, Aussie surges, all eyes on the ECB

Chinese authorities have shut down access links to Wuhan, the large provincial capital where the coronavirus originates from. The news, coming ahead of the Chinese Lunar New Year, is weighing on markets. 

Read more

WTI hits 7-week low, potential bull RSI divergence on 1H

WTI oil fell to $55.68 soon before press time, the lowest level since Dec. 3, having declined by 3.73% on Wednesday. The black gold has found acceptance below $56.60, which is the 61.8% Fibonacci retracement (one of the golden ratio) of the rally from $51.03 to $65.62.

Oil News

USD/JPY drops to fresh eight-day lows near 109.50

USD/JPY extends losses and trades close to an eight-day low near 109.50 in a relatively risk-off environment, with the media headlines full of the coronavirus as it spreads internationally. Bears can look to the golden ratio around mid-108s.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures