TD Securities analysts note that China’s June trade data revealed a -1.3% y/y fall in exports (market 1.4%), and a -7.3% y/y fall in imports (market -4.6%).
“The trade balance was bigger than expected at USD40.98bn (market USD45.0bn). The trade surplus with the US rose to USD29.92bn, with total trade with the US down -13.5% y/y. Both exports and imports reflect a combination of weakening Chinese and global trade and activity.”
“Some of the weakness in trade had been flagged by very weak trade across Asia, in particular Korea. The imports fall will be taken as a clear sign that Chinese growth momentum is waning and that need for further stimulus is growing. This will likely be confirmed next Monday, with a slowing in GDP to around 6.2% y/y likely in Q2.”