China surprised to the upside again when it reported its trade figures on Wednesday. Exports were up 46% year over year to US$94.8 billion against consensus estimates for a 38% rise. Imports rose 45% year on year to US$87.2 billion against consensus forecasts, also for 38%.
As the chart below illustrates, the figures show a slight pull back in the strong bounce-back China had been seeing. However much of this pull back is related to the Chinese new year holidays (Chinese new year, or spring festival, fell on the 14th of February this year). It is likely that trade stats will show further improvement in the March numbers as the journey back to trend continues.
As noted, and as illustrated in the growth chart below with both monthly and yearly % changes, on a monthly basis trade growth is in negative territory. While the yearly figures are pushed up by the dual effect of: Chinese new year in January and February last year, and the nadir of the crisis/recession impacting to push comparator figures down to 4 year lows.
Another point about the recent data is that China's trade surplus has clearly been shrinking. The February figure was US$7.6 billion, compared to January's US$14.2 billion. Factors that have been putting the squeeze on the surplus include lower global demand for exports, (and therefore a need to) lower prices, partially an increase in commodity prices, demand pressures impacting on already tight margins, and the impact of stimulus related spending on import volumes.
Overall the February international trade figures for China, add to a picture of improving trade, in spite of the seasonal drop-off. What's also interesting to note is the relative strength of imports, and the associated impact on the trade surplus. This could be early signs of a "new mix" or "new normal" in international trade dynamics. But it's probably more likely to be symptomatic of a long and nonlinear long cycle recovery.
(All: Trading Economics - www.tradingeconomics.com Bloomberg - www.bloomberg.com China Customs - www.customs.gov.cn Econ Grapher Analytics - www.econgrapher.com)
Article Source: http://www.econgrapher.com/chinatrade10mar.html
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