China’s Exports Decelerated in August
By Suyang Zhou - Research Analyst
China’s foreign trade rallied significantly in Q1 2017 thanks to recovered demand from home and abroad. However, an obvious deviation was identified in August trade data. Seasonal adjusted exports decelerated to 4% y-o-y, much slower than the 8.7% in July, while imports were growing 2% faster at 13.3% y-o-y. Terms of trade (ToT) in August also saw a marginal decline, indicating an unstable trade recovery. It is believed that the strong rally of Chinese Renminbi (RMB) has depressed Chinese exports in recent months. (For detailed research on RMB exchange rate, please click here).
Let’s first look into exports by region. Chinese exports to EU, US, Japan and Australia saw a slight decline in August, of which exports to EU, US and Australia dropped for two consecutive months.
By product, exports of garment & clothing accessories (-6.2% y-o-y vs. 0.5% y-o-y in July) and furniture (-2% y-o-y vs. 3.2% in July) edged down, while mechanical & electrical and agricultural product exports predominantly remained flat compared to July headlines.
Chinese imports, by contrast, saw a different pattern. By region, import from EU, ASEAN, South Korea and Brazil actually saw faster growth in August.
By product, mechanical & electrical product imports rallied four months in a row, which could be explained by new phone model production prior to the market launch season in H2 2017