Another brace of data today, this time from China, as December trade data was released showing export growth slowing and the trade surplus rising, on falling imports.
From the AFR:
China’s export growth has fallen to its slowest pace since 2009, with weak demand from the ongoing European debt crisis likely to prompt Beijing to ease monetary policy to bolster growth in the world’s second largest economy.
China’s export growth slowed to a yearly pace of 13.4 per cent in December, down from 13.8 per cent in November. It is the slowest pace since 2009 after adjustments for the volatile months of January and February.
That is still quite a strong number and has proven a boost on Asian markets, including the ASX200, but interestingly, the Shanghai Composite Index has bounced almost 5% in two days, rising 1.5% so far today:
On the other side of the equation, imports slowed dramatically below forecast. From Reuters:
Growth in imports slowed to a 26-month low of 11.8 percent, well below the 17 percent forecast.
“The main disappointment is with imports, which show a much weaker number compared to November and are way below consensus,” said Kevin Lai, an economist at Daiwa Capital Markets, in Hong Kong. “That means the boost in November was temporary, the domestic economy is slowing sharply. China will have to continue to relax policy to protect domestic demand.”
As a result, the trade surplus widened to $16.52 billion, compared to expectations of $7.8 billion, and was much higher than the November surplus of $14.5 billion.
The trade data has exceeded median forecasts and is likely to provide a boost to the ongoing consensus that China will “suffer” only a soft landing in 2012 with GDP growth for Q1 to come in at around 8.7% instead of the expected 9-10% of recent years.
Notably, the data confirmed that the Eurozone is still China’s top trading partner, at $567 billion in two-way trade, much higher than the US at $446 billion.