MNI 5 THINGS: China Trade Data To Remain Resilient In June

     BEIJING (MNI) - China's General Administration of Customs will hold a press

conference on Friday to release June 2018 trade data. Below are five things we

highlight for your attention:

     - Exports are likely to have extended their rising trend in June -- an MNI

survey of economists suggests a 10.0% y/y gain. However, the monthly figure is

likely to be the more closely watched one this month, particularly in the

context of recent yuan and commodity price volatility.

     - Imports should post another strong annual increase in June and are

anticipated to show stronger growth than that of exports for H1 as a whole. Such

an outturn would be welcomed by the Chinese government, which is implementing

policies to boost imports in an effort to achieve a more balanced trade sector.

MNI's median economist forecast points to a 21.5% y/y rise in imports, which

would be the third strongest performance so far this year.

     - We look for the monthly trade surplus to shrink further in June, based on

the expectation that imports continue to rise at a faster pace than exports. The

year-to-date surplus is expected to contract sharply.

     - With the Sino-US trade war sharply in global focus, China's trade

statistics are under close scrutiny. While trade flows would intuitively be

expected to weaken on the back of the reciprocal trade measures, for now, the

numbers are likely to show continued resilience -- particularly as they predate

the July 6 tariff implementations. Indeed, anecdotal evidence suggests that some

firms have been bringing export and import orders forward for this very reason.

This is supported by the most recent data, which shows that since the U.S. first

announced plans to target Chinese imports in April, trade flows have nonetheless

continued to grow. We expect this trend to extend into June.

     - Amid hostile trade relations with the U.S., Beijing will now be actively

looking to diversify its trading partners, in order to increase its resilience

to U.S. trade protectionism. European and OBOR countries will be in particular

focus in this regard.

--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: flora.guo@marketnews.com

--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com

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