MNI ANALYSIS: China January Trade Exceeds Expectation

     BEIJING (MNI) - China's exports and imports both unexpectedly rebounded in

January, beating forecasts. Analysts were expecting signs of a worsening outcome

from the Sino-U.S. trade war following December's tumble. 

     Exports surged 9.1% y/y to USD217.57 billion, a sharp reversal from last

month's 4.4% drop. It exceeded -2.0% y/y forecast by an MNI survey. Total value

of exports were the most ever for a January month.

     The surge was propelled by high demand from the EU and OBOR countries:

Germany 18.1% y/y, France 19.2% y/y, UK 28.8% y/y, Philippines 25.9% y/y and

Malaysia 19.7%y/y.  

     Exports to the U.S. improved from December's 9-month low of -3.5% y/y. It

was one of the few countries registering a y/y decline, falling 2.8% y/y.

     --DIVERSFYING FROM US 

     Imports fell 1.5% y/y in January following December's -7.6% y/y. The

recovery was mainly led by imports from EU and HK - 8.2% y/y and 61.3% y/y

respectively.

     Imports from Brazil (47.0% y/y) and Canada (36.1% y/y) saw the biggest

jump, showing China diversifying its purchases to manage the trade conflict with

the U.S.

     Goods purchased from the U.S. fell 41.2% y/y, the sharpest decline on

record. 

     --MARKET DOMINANCE

     Among all goods exported, mechanical & electronical equipment and labor

intensive products still dominate in value.

     Mechanical & electronical products, which account for 57.1% of the total

exports, increased by 11.5% y/y. Labor-intensive goods, including clothing,

textile such as shoes and toys, made up 20.7% of total exports and rose 17.4%

y/y in January.

     The numbers showed that Chinese low-tech products still have a stronghold

of the global market even as many manufacturers have reportedly shifted

production to other Asian countries due to rising labor costs. 

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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