MNI: China January Imports Hit 11-Month High, Surplus Narrowed

By Flora Guo

     BEIJING (MNI) - China's General Administration of Customs released the

latest trade statistics on Thursday: 

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

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

January                  11.1           36.9            20.34

MNI Forecast              9.8            8.5            56.70

December                 10.9            4.5            54.69

     --JANUARY IMPORTS HIT 11-MONTH HIGH

     Imports grew 36.9% year-on-year, beating market consensus looking for an

8.5% y/y gain and ahead of last month's 4.5% y/y increase. The jump in imports

growth hit an 11-month high, maintaining its 15 months of consecutive gains.

     Rising commodity prices, petroleum products as well as other raw materials,

could boost imports value while the Yuan can be another contributor to the

strong growth -- the yuan rose nearly 3.5% against U.S. dollar in January, the

biggest single month increase since foreign exchange reform in 2015.

     Against that, the Chinese lunar new year falls in February this year, later

than in 2017 (late-January). The calendar difference will impact import volume,

as manufacturers hold bigger inventories, or catch up with backlog orders before

the Chunjie Festival.

--JANUARY EXPORTS CONTINUED RISING

     Compared with the imports, exports were flat at the beginning of the year.

January exports rose 11.1% year-on-year in U.S. dollar terms, a touch higher

than both MNI's survey median forecast for a 9.8% y/y gain and December's 10.9%

y/y growth. However, it is still the highest January gain in five years. 

     Again, the holiday timing, or high base effect, impacts the statistics.

China exports to three largest trade partners (the European Union, the United

States and Japan) have all declined in January, down by 10.0%, 10.6% and 3.9%

respectively.

--TRADE BALANCE NARROWED

     The trade balance narrowed to $20.34 billion in the first month of 2018.

This is the smallest surplus reported since March 2015.

     The imports has made a stride in January to reverse the situation of being

exceeded by the exports seen in last month, which, in other words, has levelled

down the trade surplus.

--TOP 3 TRADE PARTNERS DONE WELL, ASEAN DRAW MORE ATTENTION

     The European Union, the United States and Japan continued to be the top 3

trade partners to China. Exports and imports to/from the three regions counted

41.8% and 29.7% respecively of the overall trade value.

     Trade with ASEAN (Association of Southeast Asian Nations) continues to

grow. Exports to ASEAN amounted to over 70% of the total, of which the U.S. was

the biggest importer. Imports from ASEAN performed even better -- beating all of

other countries and zones into first place. ASEAN is included in "one belt, one

road" grouping whose economies including trade are expected to grow rapidly on

base of the policy.

     --MECHANICAL PRODUCTS EXPORTS INCREASED, LABOR INTENSIVE DECLINED

     In terms of regular export products, other than a pick-up by mechanical and

electrical products, labor intensive products declined at a 5.3% rate. Steel

products exports fell 36.6%.

     Overall 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 the briefing citing uncertainties in the global economy and higher basis of

comparison from last month.

--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: beijing@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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