China: disappointing trade figures

Chart of the week

China’s December trade figures showed both weaker exports and imports, further compounding November’s disappointing data. While exports fell 4.4% year-on-year, imports were down 7.6% (US$ terms) compared with respective rises of 3.9% and 2.9% one month earlier.


Is the slowdown in China’s exports due to higher US customs duties? The answer is that they probably have been a contributory factor but are not the only one.

Exports to the US have indeed slowed (-3.5% in December following +9.5% year-on-year), and the portion of exports to Hong Kong that is then sent on to the US has also stalled (-26.0% following +2.7% year-on-year).

However, Chinese exports to various other geographic zones have also been contracting, reflecting a worldwide slowdown in demand in the past two months.

The slowdown in imports is just as broad-based, suggesting softening domestic demand in China. December’s economic data and the nation’s fourth-quarter growth release on January 21st should provide some more information to complete the picture.

The opinion expressed above is dated January 17th 2019, and liable to change.

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Julien-Pierre Nouen

Directeur des études économiques et de la gestion diversifiée