14 Jan 2016
China: Surprising strength in December trade data - Nomura
FXStreet (Delhi) – Research Team at Nomura, notes that the Chinese export growth in CNY terms rose to 2.3% y-o-y in December from -3.7% in November, stronger than expected (Consensus: -4.1%; Nomura: +0.4%).
Key Quotes
“The growth was partly on CNY depreciating against USD by 4.3% y-o-y in December as most trade contracts being denominated in USD terms. This could, however, also be a tentative sign of improving external demand.
Import growth, in CNY terms, also improved, to -4.0% y-o-y in December from -5.6% in November, against expectations of a larger fall (Consensus: -7.9%; Nomura: -8.4%), despite lower commodity prices. This possibly points to some stabilisation in domestic demand. As a result, the trade surplus widen to RMB382.1bn from RMB343.1bn in November.
For 2016, we expect modest positive export growth partly due to a low base and the import contraction to narrow as the effect of low commodity prices fades.
Overall, the December trade data, together with the high-frequency data and leading indicators, have offered further signs of the economy stabilising, albeit at a low level. Nevertheless, we still expect growth to resume a downtrend later in the year given ongoing structural headwinds.”
Key Quotes
“The growth was partly on CNY depreciating against USD by 4.3% y-o-y in December as most trade contracts being denominated in USD terms. This could, however, also be a tentative sign of improving external demand.
Import growth, in CNY terms, also improved, to -4.0% y-o-y in December from -5.6% in November, against expectations of a larger fall (Consensus: -7.9%; Nomura: -8.4%), despite lower commodity prices. This possibly points to some stabilisation in domestic demand. As a result, the trade surplus widen to RMB382.1bn from RMB343.1bn in November.
For 2016, we expect modest positive export growth partly due to a low base and the import contraction to narrow as the effect of low commodity prices fades.
Overall, the December trade data, together with the high-frequency data and leading indicators, have offered further signs of the economy stabilising, albeit at a low level. Nevertheless, we still expect growth to resume a downtrend later in the year given ongoing structural headwinds.”