Foreign trade better than expected
Print Edition
CHINA’S foreign trade fared better than expected in November with imports declining much less though exports continued to fall, according to data from the General Administration of Customs.
Exports last month fell 3.7 percent year on year to 1.25 trillion yuan (US$198.4 billion), down from October’s drop of 3.6 percent. Imports, meanwhile, contracted 5.6 percent to 910 billion yuan, compared to the previous month’s 16 percent slump.
As a result, November’s trade surplus was 343.1 billion yuan, up 2 percent year on year but less than October’s 393.3 billion yuan surplus.
“The decrease in trade surplus is largely due to improved imports last month,” said Liu Ligang, chief economist at Australia & New Zealand Banking Group. “As commodity prices fell sharply in the fourth quarter of last year, the price effect on the yearly growth rates has started to fade, and will fade further in the months to come.”
Liu said the headline growth rate of imports could start to improve in 2016 as the price effect diminishes.
Lian Ping, chief economist at Bank of Communications, said overall trade performance, although better than October’s and previous expectations, remained weak.
“China has implemented some quite accommodative measures to support trade, but they have yet to stimulate the sector as the authorities might have expected,” Lian said.
In the first 11 months of the year, China’s trade fell 7.8 percent to 22.08 trillion yuan, with exports down 2.2 percent to 12.71 trillion yuan and imports down 14.4 percent to 9.37 trillion yuan. The trade surplus for the January-November period surged 63 percent from a year earlier to 3.34 trillion yuan.
“The large trade surplus could help offset the capital outflow and curb expectations of the yuan’s depreciation,” Liu said. “But the rate is bound to become more volatile going forward as China continues to open its capital account.”
Late last month, the yuan was included in the International Monetary Fund’s Special Drawing Rights basket, guaranteeing that the People’s Bank of China would continue to open its capital account.
“Given that China must have an independent monetary policy, it suggests that the exchange rate policy must become a floating one, and it will produce certain effects on trade,” Liu said.
China’s economy rose 6.9 percent in the third quarter, its slowest pace in six years.
Earlier data showed activities in the manufacturing sector plunged to their worst level in more than three years. The official Purchasing Managers’ Index fell 0.2 points from October to 49.6 last month, indicating uncertainties in the outlook for the world’s second-largest economy.
But there is some optimism. The Asian Development Bank has raised its forecast for economic growth this year to 6.9 percent from its previous 6.8 percent.
The European Union remained China’s largest trading partner in the first 11 months, though the total trade fell 7.7 percent year on year to 3.16 trillion yuan.
China’s trade with the United States rose 1.9 percent to 3.15 trillion yuan, while trade with ASEAN countries fell 2.1 percent to 2.6 trillion yuan. Trade with Japan dropped 10.4 percent to 1.57 trillion yuan.
Foreign trade involving China’s private firms fell 1.8 percent to 8.11 trillion yuan, or 36.7 percent of the total. State-owned enterprises, meanwhile, saw their foreign trade fall 12.9 percent year on year to 3.65 trillion yuan, or 16.5 percent of the total.
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