In the view of the analysts at TD Securities (TDS), the slide in the Chinese imports data raised demand concerns from the world’s top consumer amid US-China trade war and suggested a worsening economic outlook.
Key Quotes:
“China’s May trade data revealed a 1.1% y/y rise in exports (market -3.9%, TD -0.5%) while imports dropped -8.5% y/y (market -3.5% y/y, TD -2.3%) resulting in a trade surplus of $41.65bn (market $22.3bn).
The weakness in imports will once again renew concerns about China’s economy especially given the complicated path in delivering a US-China trade deal. As we highlighted Korean trade data and China’s PMI had indicated a soft outcome even as a rise in imports in April had fueled misplaced hopes of stability. We look for further weakness ahead as indicated by weakening PMIs among China’s key trading partners.
Exports to the US jumped, up 20.2% m/m though the 4.3% m/m increase in imports from the US is less impressive. US officials will not take kindly to the increase in China’s bilateral trade surplus back to around record levels at $329.8bn (12m).”
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