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Downside Export Surprise, But Limited Market Impact


The China trade data for October disappointed relative to expectations. Export growth came in at -0.3% y/y, versus +4.5% expected, while imports fell -0.7%, against a flat expectation from the market. The trade surplus was also below consensus, $85.15bn, against a $95.97bn forecast.

  • Export growth has steadily lost altitude through 2022, particularly in recent months, which is in line with trends in other North East Asian economies, see the chart below. This is also the first y/y drop for China exports since the first half of 2020.

Fig 1: Export Growth Trends, China, South Korea & Taiwan, Y/Y

Source: MNI - Market News/Bloomberg

  • It complicates the China growth backdrop, as last year and in the first half of this year, exports were performing more strongly. This slowdown is also another sign that the global economy is losing some momentum.
  • The weaker import trend suggests the overall domestic demand backdrop remains fairly subdued. The import growth picture has been around flat since March of this year.
  • The trade balance miss is only modest, and the underlying surplus position remains intact.
  • The market impact from the trade figures has been modest though (little move in the likes of USD/CNH, AUD/USD etc), with higher China/HK equities an offset as market focus remains on potential shift away from CZS.
  • It's also fair to say weaker CNH levels have priced in a slower export picture, see the second chart below, although this has not been a key driver of CNH trends in 2022 to date.

Fig 2: CNH/USD Y/Y Versus China Export Growth

Source: MNI - Market News/Bloomberg

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