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BEIJING (MNI) - China's exports and imports both unexpectedly worsened in
December, adding another drag on the economy many expected to slow significantly
Exports fell by 4.4% y/y to USD221.25 billion in December, both at the
lowest in two years and lower than 4.8% y/y increase projected by an MNI survey
of economists. That dragged total exports for the year to a growth of 9.9% y/y
to USD2.49 trillion, compared with 11.8% growth in Jan-Nov period.
"Trade growth may slow" in 2019 due to greater external uncertainties,
including slowing global growth and rising protectionism, as well as a higher
base of comparison, Li Kuiwen, a spokesman at the General Administration of
Customs, said in Beijing.
Exports to the U.S. fell by 3.5% y/y in December, first drop in eight
months, while those to the EU and Japan contracted by 0.3% y/y and 1.0% y/y,
Chinese exporters are suffering due to shrinking orders from overseas as
well as lack of financing made difficult after the government tightened the
screw on the financial sector last year.
Imports plunged by 7.6% y/y in December, compared with growth of 3.0% y/y
in November, ending the consecutive growth in 25 straight months. Despite
December's drop, whole-year imports still rose 15.8% y/y at the value of USD2.14
Imports fell 35.8% y/y with the U.S. and registered -2.7% and -11.4% with
the EU and Japan.
The outlook for January trade performance is expected to dim further. As
the Donald Trump administration early last year threatened to apply punitive
tariffs on Chinese exports, many exporters rushed to fill their orders. That
front-loading effect has worn off and now more people began to believe the trade
tension could last longer than expected.
January's trade performance may be further worsened by the Chinese New Year
on Feb 5th, which is earlier than usual and may lead to more factories
shuttering. Chinese migrant workers residing and working at factories may take
as long as one month off to make their annual visits to rural homes.
China began to boost imports after President Xi Jinping in March proposed
further opening up, lowering tariffs and boosting imports. China said it will
further open to foreign trade and investments, including hosting another imports
expo in November.
Still, in a sign of weakening demand, imports growth dropped sharply in
November to 3.0% y/y.
Weak trade statistics from December, together with series of economic
indicators including CPI (1.9% y/y in Dec), PPI (0.9% y/y in Dec) and PMI (49.4
in Dec), all showed the ongoing downward pressure on the Chinese economy.
While the December trade numbers were bad, things can get worse this month.
One economist described 2018 as "the worst year in the past 10, the best year in
the future 10."
--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: firstname.lastname@example.org
--MNI Beijing Bureau; +86 10 8532 5998; email: email@example.com