China: Trade data driven down by collapse in bilateral US-China trade – ABN AMRO

Arjen van Dijkhuizen, senior economist at ABN AMRO, points out that Chinese foreign trade growth for October remained in negative territory.

Key Quotes

“Both export and import numbers came in slightly better than in September and above consensus expectations. Exports in USD terms contracted by -0.9% yoy (Sept: -3.2%, consensus: -3.9%). Imports in USD terms contracted by -6.4% yoy (Sept: -8.5%, consensus: -7.8%).”

“We should add that the weakness in foreign trade data is still to a large extent dominated by the US-China trade/tech conflict. Chinese exports to the US were down 16.2% yoy in October and 11.6% yoy in the first ten months of this year.”

“Chinese imports from the US were down 14.3% yoy in October and 25.4% yoy in the first ten months of this year. Imports from the EU were down -3.0% yoy in October, but are stable in January-October. Imports from Germany contracted by almost 12% yoy in October and by almost 3% in January-October.”

“All this suggests that the US-China trade conflict is still the dominant factor in explaining China’s weak foreign trade growth numbers. This not only reflects the collapse of bilateral trade, but also the impact of the conflict on global growth and trade. Regarding imports, the weakening of domestic demand has been a drag as well.”