China exports snap losing streak as imports surge

Beijing - China’s exports gained, snapping a seven-month losing streak, as a cheaper yuan aided foreign purchasing. Imports jumped the most in more than two years on strong demand for raw materials from copper to iron ore.

Key points

Overseas shipments rose 0.1% in dollar terms from a year earlier in November Imports climbed 6.7%, decreasing the trade surplus to  $44.6bn Exports and imports both exceeded estimates of all 43 economists in Bloomberg surveys

Big picture

The yuan has fallen 10% against the US dollar since a surprise devaluation in August 2015 while remaining stable recently against a basket of currencies.

The data suggest global demand is recovering even as the world’s largest exporter faces potential headwinds and policy uncertainty as US President-elect Donald Trump prepares to take office January 20.

Economist takeaways

"Today’s data pointed to a modest recovery in both external and domestic demand," Jing Li, greater China economist at HSBC in Beijing, wrote in a note. "The outlook on the other hand, remains more uncertain given potentially more protectionist US trade policy. This also gives policy makers more reason to accelerate domestic reflation policies."

"Better-than-expected trade data out of China today reflects both an uptick in global demand as well as the continued strength of the domestic economy," said Julian Evans-Pritchard, an economist at Capital Economics in Singapore. "Despite today’s positive surprise, the medium-term outlook for Chinese trade remains challenging."

"Looking forward, the base case is that China’s exports will return to growth in 2017 on yuan weakness and stronger US demand," Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, wrote in a report. "The big unknown is what happens to US trade policy, with the risk that tariffs could choke off overseas sales."

"Recovering domestic demand has pushed up imports," said Larry Hu, head of China economics at Macquarie Securities in Hong Kong. Exports turning positive "reflects a wide improvement in the global economy this year."

The details

Exports to the US, China’s largest trading partner, rose 8.1%. In yuan terms, exports rose 5.9% and imports jumped 13% Copper imports climb, ore purchases surge to record Coal imports surge to most since 2014, crude imports rise Steel exports set to contract for first year since 2009.

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