China’s trade data for last month beat expectations, as demand from a stronger US economy helped offset weakness in Europe and Japan, while Chinese bargain-shopping in commodities markets put a floor under sliding imports.
However, while exports grew faster and imports shrank less than forecast, trade officials warned of more headwinds to come in the first quarter.
Policymakers are trying to steer the world’s second-largest economy through a soft patch as it confronts weak demand and a slowdown in its property market.
Exports rose 9.7 percent last month from a year earlier in US dollar-denominated terms, data from China’s General Administration of Customs showed yesterday, handily beating a Reuters poll by nearly 3 full percentage points.
Imports dropped only 2.4 percent, versus consensus forecasts of a far steeper dip of 7.4 percent.
Officials were cautious when discussing how much positive momentum trade would deliver.
“We think the negative factors that crimped trade performance in 2014 will be sustained for a period of time,” said Zheng Yuesheng (鄭躍聲), a spokesman for China’s customs bureau.
Zheng was referring to factors such as a weak recovery in the world economy, falling foreign direct investment in Chinese manufacturing and rising domestic production costs.
The smaller decline in imports than in November was largely due to a resurgence in commodity purchases, with Zheng saying that sliding prices had been a net benefit for China by reducing import costs.
China posted a trade surplus of US$49.6 billion for the month, smaller than November’s record US$54.5 billion.
China imported 30.37 million tonnes of crude oil last month, or 7.15 million barrels per day (bpd), topping the 7 million bpd mark for the first time, customs data showed, as the world’s largest oil importer took advantage of low global prices to fill its strategic reserves.
China also purchased a record-high volume of iron ore.
However, falling commodity prices have proven to be a net negative for Chinese industrial profits, and analysts warned that investors should not read too much into the recovery in imports.
“The jump in commodities imports was a big boost to overall trade figures [but] is not a reflection of underlying demand,” CLSA Research energy analyst Nelson Wang said.
For the full year, China’s total trade value increased 3.4 percent from a year earlier, short of the official target of 7.5 percent.
“Today’s data means China’s export sector remains one of the world’s best performing,” Julian Evans-Pritchard, China economist at Capital Economics, wrote in a research note.
“Although the global economy remains fragile, we nonetheless expect growth in many of China’s key export markets, such as the US, to stage a slight recovery this year, which should provide support to Chinese exports,” he said.
However, he added that “those anticipating a stimulus driven pick-up in investment or a marked turnaround in the property sector will be disappointed.”
Stock markets posted little reaction to the trade data. Spot yuan ticked up slightly, but demand for the currency has flagged in the face of an ascendant greenback.
“The continuous appreciation of the US dollar since October had a smaller-than-expected impact on China’s exports; the depreciation of the yuan since late November also contributed to it,” said Nie Wen (聶文), economist at Hwabao Trust Co Ltd (華寶信託) in Shanghai, adding that he expected China’s exports this year to be depressed by offshore currency movements.
“Monetary authorities are very likely to engineer a periodic depreciation of the yuan if the next export figure is sluggish,” Nie said.
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