China: Ordinary import growth slows significantly in December - Nomura

Research Team at Nomura notes that the China’s slowing of export growth was led mainly by exports to developed economies as the export growth in USD terms fell to -6.1% y-o-y after rebounding to -1.6% y-o-y in November (Consensus: -4.0%; Nomura: -8.5%).

Key Quotes

“By destination, export growth to the US, EU and Japan all slowed, while export growth to ASEAN picked up slightly.”

“Ordinary import growth slowed markedly, despite the more modest slowdown in headline growth. Total import growth In USD terms moderated to 3.1% y-o-y from 4.7% in November (Consensus: 3.0%; Nomura: -1.0%), leaving a narrower trade surplus of USD40.8bn. Ordinary imports growth slowed by a more significant 7.9 percentage points (pp) to 4.8% y-o-y in December. Excluding commodity imports, the drop was even larger at 11.4pp. Commodity imports picked up in December, but this was driven mainly by higher prices, as import growth of both iron ore and crude oil in volume terms fell.” 

“Trade data suggest sluggish domestic demand in December. We are comfortable with our forecast of slightly slower production and investment growth in December. The annual trade surplus narrowed in 2016, which means the contribution from net exports to real GDP growth may have declined. We maintain our forecast for a slowing of real GDP growth to 6.7% in 2016 from 6.9% in 2015.”