9 Mar 2015
Chinese exports surge, imports subdued – Danske
FXStreet (Barcelona) - Flemming J. Nielsen, Senior Analyst at Danske Bank reviews the Chinese trade balance data release, noting that the substantial increase in export was a result of the Chinese New Year holiday, and further adds that the trade data doesn’t support the case for a weaker CNY.
Key Quotes
“Chinese foreign trade data for February released on Saturday showed export growth was substantially stronger than expected, while import growth remained subdued. Export growth accelerated to 48.3% y/y (consensus: 14.0% y/y) from -3.2% y/y in January, while imports contracted 20.5% y/y (consensus: 10.0% y/y) after contracting 19.75% y/y in January.”
“The data was substantially distorted by the timing of the Chinese New Year public holiday. Exports usually surge and imports decline just ahead of the holiday as inventories are reduced. This year the surge in exports happened in early February in 2015 compared with late January last year, due to the timing of the holiday.”
“In our view, the foreign trade data for January and February probably exaggerate both the strength in exports and the weakness in imports and there probably will be some pullback in March.”
“Nonetheless, exports appear to be doing relatively well, with strong gains in particularly to the US and the ASEAN countries. However, exports to Europe are also improving and exports to Japan appear to have stabilised.”
“In our view, the foreign trade data for 2015 so far does not support the case for a weaker CNY.”
“Exports appear to be doing reasonably well and the trade balance surplus is surging. We think this buoyant surplus will eventually outweigh the current capital outflows, which we expect to subside.”
Key Quotes
“Chinese foreign trade data for February released on Saturday showed export growth was substantially stronger than expected, while import growth remained subdued. Export growth accelerated to 48.3% y/y (consensus: 14.0% y/y) from -3.2% y/y in January, while imports contracted 20.5% y/y (consensus: 10.0% y/y) after contracting 19.75% y/y in January.”
“The data was substantially distorted by the timing of the Chinese New Year public holiday. Exports usually surge and imports decline just ahead of the holiday as inventories are reduced. This year the surge in exports happened in early February in 2015 compared with late January last year, due to the timing of the holiday.”
“In our view, the foreign trade data for January and February probably exaggerate both the strength in exports and the weakness in imports and there probably will be some pullback in March.”
“Nonetheless, exports appear to be doing relatively well, with strong gains in particularly to the US and the ASEAN countries. However, exports to Europe are also improving and exports to Japan appear to have stabilised.”
“In our view, the foreign trade data for 2015 so far does not support the case for a weaker CNY.”
“Exports appear to be doing reasonably well and the trade balance surplus is surging. We think this buoyant surplus will eventually outweigh the current capital outflows, which we expect to subside.”