MNI: China Dec Imports Slow On Weaker Commodity Purchases

--Exports Growth Rate 3th Highest in 2017

--Imports Growth Rate Eases To the Slowest in 2017

--Trade Surplus Surges 23-month High 

     BEIJING (MNI) - Data released Friday by the General Administration of

Customs:

                   Balance (bln $)  Exports Y/Y %  Imports Y/Y %

----------------------------------------------------------------

December                      54.7           10.9            4.5

MNI Survey Median             38.0           10.0           15.0

Previous                      40.2           12.3           17.7

     FACTORS:

--China Dec. Seasonally Adj. Exports +7.0% m/m VS +7.4% Nov.

--China Dec. Seasonally Adj. Imports +3.4% m/m VS -5.5% Nov.

--China Dec. Seasonally Adj. Exports +12.7% y/y VS +12.8% Nov.

--China Dec. Seasonally Adj. Imports +8.7% y/y VS +17.8% Nov.

     TAKEAWAY: Chinese exports and imports growth both decelerated in December

with imports registering slowest gain in a year. Trade surplus rose to  highest

since January, 2016. 

     The slowdown indicated both domestic and overseas demand lost their stream

last month, particularly domestic demand. 

     --IMPORTS SHAPRLY SLOWER

     Overall imports by the second-largest economy increased 4.5% year-on-year

in December, much lower than median forecast for a 15.0% gain and well below the

17.7% rise in November. 

     The sluggish domestic demand for commodities contributed to the slowdown

after production restrictions imposed by supply-side reform and environmental

protection. Inventory of commodities also rose sharply in recent months,

reducing demand for further purchases.

     Imports of iron ore, totaling 84.14 million tons, decreased 11% in December

from November, compared with a increase of 18.93% in the previous. Petroleum

product imports decreased 9% to 37.04 million tons, from a increase of 3.62% in

November. 

     The rising prices of some commodities including petroleum products

discouraged imports. High comparison bases in December last year also

contributed the weak year-on-year growth rates. 

     The performance of imports was in contrast to the official CFLP

manufacturing PMI, with the import sub-index rising to 50.2 from 50.0 in

November.

     --STRONG EXPORTS

     According to the General Administration of Customs, December exports rose

10.9% year-on-year in U.S. dollar terms, higher than MNI's survey median

forecast for a 10.0% y/y gain and below the growth rate of 12.3% in November.

     Among China's three biggest trading partners, export growth to the United

States and the European decelerated while exports growth Japan largely

accelerated.  

     Exports to the U.S. rose 12.7% year-on-year to $41.76 billion, down from

14.3% growth in November. Exports to the European Union grew 12.7% to $37.75

billion, compared with a 13.2% growth in the previous month. However, exports to

Japan rose 14.9% to $12.95 billion, the highest growth rate in 2017. 

     --SURGING TRADE SURPLUS  

     The import growth rate continued to outpace the export growth rate in

December, the 17th consecutive month it has done so, but level of exports

continue to exceed that of imports, resulting in a $54.69 billion trade surplus.

The surplus was higher than the MNI survey median forecast for a $37.90 billion

surplus and above November's $40.21 billion surplus.

     For the full-year 2017, trade surplus fell to $422.51 billion from $509.71

billion in 2016. Exports rose 7.9% on year while imports gained 15.9%.

     Trade is expected to grow at a slower pace in 2018. "It may be hard to

maintain a double-digit increase," Huang Songping, a customs spokesman, said in

a briefing citing uncertainties in global economy and higher basis of

comparison.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

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

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