Seeking Alpha

Chinese trade surprisingly grows

  • Chinese exports increased 0.9% on year in April after falling 6.6% in March and beat consensus for a drop of 1.7%.
  • Imports +0.8% vs -11.3% and -2.3%.
  • The trade surplus more than doubled to $18.45B from $7.71B and topped forecasts of $13.90B.
  • Exports breakdown: U.S. +4.1%, EU +7.8%, Southeast Asia +5.9%, Taiwan -9.7%, Hong Kong -31.3 (due to problematic invoicing last year).
  • The readings follow other data which indicate that China's economy has been slowing and come after a 2.8% fall in the yuan vs the dollar this year.
  • The strong growth "will create pressure for China to reverse the recent yuan depreciation," says Citigroup economist Ding Shuang.
  • "The external demand side is not such a big problem for China now, because the genuine recovery is there," says Wei Yao, the China economist at Societe Generale. "This is actually offering some support to China's growth."
  • The Shanghai Composite is +0.4%.
  • ETFs: FXI, PGJ, GXC, FXP, KWEB, YINN, CYB, HAO, CNY, ASHR, CHIQ, DSUM, YANG, TAO, CHIX, CQQQ, MCHI, QQQC, PEK, XPP, YAO, CHXX, YXI, CHXF, FXCH, CHII, ECNS, CHIM, CHIE, FCA, KFYP, CHLC, TCHI, CHNA, KBA, CN
From other sites
Comments (1)
  • Mike Holt
    , contributor
    Comments (1627) | Send Message
     
    There are two stories here.

     

    The first is the 31.3% decline in exports to Hing Kong "due to problematic invoicing last year."

     

    The second is the correlation between exports and valuations for the Japanese and Chinese currencies. The Japanese Yen weakened last year and this made Japanese exports more competitive. More recently, the Japanese Yen has stabilized with a modest strengthening, while the Chinese Yuan weakened from 6.05 to 6.25 in recent months and this appears to have helped promote Chinese exports. So, to the extent the announced figures have any credibility, to what extent do they reflect an overall increase in global trade vs. a shift in market share between Japanese and Chinese companies vying for economic growth anyway they can, with economic rebalancing being of less concern to either country as it is to countries with large trade deficits.
    8 May 2014, 07:56 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs