Trade data for January was officially released this week. The breakdown:
- Export growth picked up slightly to 11.1% y-o-y from 10.9% in December, in line with estimates (in USD)
- Imports saw a massive surge in growth, growing to 36.9% from 4.5% in December.
- In real volume terms, this was a jump to 26% from -4%.
- The trade surplus for the month, therefore, contracted to $20.3bn, from $54.7bn.
Here’s what the analysts had to say:
Mizuho saw the export data as weak, particularly given the normally expected push in demand ahead of the Spring Festival. This could be due to the recent rallying behind the RMB. Nevertheless, their outlook is calm, that “overall trade growth will remain resilient amid the solid recovery both domestically and abroad”.
Nomura will not change its economic outlook considering the new data: “We maintain our call for a gradual growth slowdown in the quarters ahead”.
With regards to foreign exchange, Nomura point to a possible negative effect of the smaller trade surplus on near term RMB sentiment, but remain positive in the mid-term given resilient growth momentum and robust export growth.
UBS note how imports surged in a range of sectors and from several geographic regions. Import growth from ASEAN, HKT, and commodity-producing countries all picked up by at least 10%. Crude oil imports rose both by volume and dollar-value terms, they mention.
ANZ said the weak export growth in the electronics sector could be a cause for concern. They explain that China is “is far more exposed to the global electronics cycle than the rest of the emerging markets universe”, and is prone to follow the cycle of global electronic demand.