10 September, 2017
Chinese trade data had something for everyone in August with export growth continuing to slow while at the same time imports surged.
BEIJING-China's exports grew 6.9% in August from a year earlier in yuan terms, following an 11.2% gain in July, official data showed Friday.
The yuan has gained almost 7.8% against the dollar so far this year, including just over 6% since late May, more than making up its losses of 6.5% in 2016 - the biggest annual drop since 1994. For much of the past two years, lackluster global demand has dragged down China's growth. "Wherever you look at-the U.S., European Union or Japan-external demand is still robust", said Jian-guang Shen, an economist at Mizuho Securities.
Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group, believes that China's third-quarter growth will see an "upside risk again" in light of the latest figures.
Benchmark three-month copper on the London Metal Exchange hit a three-year high at $6,970 per tonne on Tuesday.
Chen Lin, a general manager at Hefei DGCT Imp. & Exp. Co.
"The impact is simple and clear".
But the Chinese currency this year has erased its 2016 losses, thanks largely to the USA currency's sharp reversal and Beijing's steady tightening of forex controls. If we can bargain with our clients and raise our price by 5%, that may help.
"Overall, we think one-way yuan appreciation would face correction pressure, either induced by policy actions or driven by the market", the analysts said.
Still, the authorities are unlikely to intervene forcefully to weaken the yuan for fear of sparking fresh criticism over its currency practices from the United States, the policy insiders says.
Forecasters have warned Chinese economic growth will cool this year, dampening demand for foreign goods as controls on bank lending to slow a rise in debt take hold. Last month, Trump gave the go-ahead for an investigation into trade with China, a move that could result in punitive tariffs on China's exports to the US.
"There appears to have been a broader decline in external demand", Julian Evans-Pritchard of Capital Economics said in a note.
