MNI DATA PREVIEW: China December Trade Set For Modest Rebound

     China trade data is expected to bounce back for both exports and imports in

December, helped by an easing in trade tensions with the U.S., base effects, a

steadying if not improving domestic economy and a boost from an earlier Lunar

New Year holiday period.

     --STEADY DOMESTIC ECONOMY

     China PMI readings have been in positive territory for two consecutive

months -- standing at 50.2 in December, indicating modestly expanding

production. Looking into the sub-indicators, the new export orders index,

considered a leading indicator for exports growth, rose to 50.3 from last

month's 48.8. The Imports index rose to 49.9 in December. 

     --LOW BASE EFFECT

     Relatively lower trade growth in December 2018 will be another favorable

factor supporting a pick up last month. Exports fell 4.4% y/y and imports fell

7.6% y/y in Dec 2018, both recording the sharpest drop that year, making it

easier for exports and imports to rise y/y this time. 

     Any increase could also benefit from higher export and import volumes and

prices due to the early Chinese New Year this year, coming in late January

rather than in February.

     --TRADE TENSION EASED

     China signing a "phase one" deal with the U.S. by Jan 15 could boost rising

volume in agricultural imports. 

     China trade data is due to release on Tuesday, Jan 14 by General

Administration of China Customs.

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

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

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