For China bulls there was a pleasant surprise in yesterday’s August trade figures – they were better than expected.
The improvement in exports, and especially imports (the first rise in the latte for 22 months) surprised on the upside as it seems buyers took advantage of the weak yuan (and despite higher prices for some commodities such as iron ore, coal, lead, zinc and nickel, but not wheat and other grains).
Exports in US dollar terms fell 2.8% year-on-year in August, improving from the 4.4% dip in July.
Imports in dollar terms followed the trend seen in renminbi-denominated trade figures, rising to a rise of 1.5%, after having plunged 12.5% in July.
According to China’s General Administration of Customs, the trade surplus for the month was $US52 billion, from July’s balance of $US50.23 billion, and less than the $US58 billion estimate from forecasters.
Shipments to most major trading partners shrank less in annualised terms compared to the previous month, with some even returning to expansion.
Exports to the US fell only 0.2% to $US36.16 billion compared to the 2% drop in July.
Shipments to the EU rose 2.4% to $3U2.48 billion after dropping 3.2% in July, while shipments to Asean countries fell 2%, better than the 3.9% drop the month before.
Exports to South Korea eased less than 1% (0.8%), but shipments to Japan rose 0.3% last month after a 5% slide in July.
Exports to Hong kong plunged 17.8% to $US23.32 billion, a sign that the crack down on dodgy export invoicing is still in force.
China’s renminbi-denominated exports rose 5.9% year-on-year in July while imports in local-currency terms jumped 10.8%. Imports from the U.S. slipped, while they increased 13.2% from Japan and 12.7%from the European Union.
Foreign trade with the European Union, China’s biggest trade partner, climbed 3.5% year on year in the first eight months. Trade with the United States, China’s second-biggest trade partner, fell 3.2%, and that with ASEAN, its third-largest trade partner, declined 1.1%. Meanwhile, figures out yesterday showed that China’s passenger-vehicle sales boom continues because of the ending of a tax break later in the year.
Sales rose for a sixth consecutive month as consumers rushed to buy ahead of a tax cut due (favours smaller sized engines) to expire at at the end of December (it started in mid 2015).
Retail sales of cars, sport utility and multipurpose vehicles increased 24.5% to 1.8 million units in August, the China Passenger Car Association said yesterday, taking deliveries for the first 8 months of the year to 14.2 million units.
