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Inflation Concerns Underpin Bear Steepening


Bullish Theme


Firm Within Its Bull Channel

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China's trade will maintain the growth momentum of the second half amid the global recovery and vaccination drive, although the high base of Q2 exports and external uncertainties may pose challenges, said Li Keiwen, spokesman of the General Administration of Customs.

The global manufacturing recovery helped boost China's exports to the EU, the U.S. and Japan by 48.5% in Q1, contributing 44.2% to total export growth, said Li. Total exports and imports grew 38.7% and 19.3%, respectively, in Q1 while total trade grew 29.2% in Q1. When compared to the pre-covid 2019 period, Q1 trade still grew 20.5%, Li added. However, on a sequential basis, Q1 exports fell 12.3% and imports rose just 0.1%, said Li, noting that the exports decline was the smallest in recent years as the Lunar New Year holiday usually has a greater impact on production.

On the import front, growth was partly driven by rising international commodity prices with import prices of iron ore, copper ore and soy beans increasing by 53.5%, 28%, and 11.1%, respectively, y/y.