JAKARTA (TheInsiderStories) – IHS Markit rated China’ export data in September will likely lead to a downward revision to the current export growth forecast, which stands at 0.9 percent in annual basis (YoY), said the analyst today (10/14).
As known China’ exports declined 3.2 percent in September in terms of US Dollar, the second consecutive month of contraction, according to the General Administration of Customs.
Yating Xu, senior economist at the agency asserted, although United States (US) and China reached a tentative trade deal, which will help to ease short-term risks, accumulated impact of already imposed tariffs, the uncertainty of long-term trade solutions and the slowing global economy will continue to drag on China’s export growth.
“September import data will also likely lead to a downward revision to the current import forecast of down 3.64 percent YoY,” she adds at the written statement.
Xu revealed, the current stimulus policies on infrastructure investment, consumption and financing cost cut seem insufficient to offset headwinds from the cooling real estate market, declining industrial profits and deteriorating overseas demand. Imports are expected to remain weak in the fourth quarter as a much more aggressive stimulus package will not likely be made in the remainder of 2019 given the debt overhang and eased trade-tensions.
Expansion in trade surplus caused by a faster deterioration in imports is expected to continue throughout 2019 due to weakening domestic demand. According to her, deteriorating global economy drove down demand from major trade partners.
Manufacturing purchasing managers’ index (PMI) in the European Union and Japan remained in contraction territory and the US reported the lowest PMI in 10 years. Moreover, uncertainty of the China – US trade tension outlook and tariff hikes continued to weaken the US demand.
China’ exports to the US dropped 21.9 percent YoY in September, the second weakest rate since the beginning of 2019. While, imports declined 8.5 percent compared to last year in terms of US Dollar, a co-fastest rate with May since the beginning of 2019.
Imports of main products, including airplane, copper, LCD and soybean recorded sharp decline. However, import volume of crude oil and pork continued to surge, partially reflecting domestic supply shortage. The cumulative imports declined 5.0 percent YoY in the first three quarters.
Overall,the custom office data reported, trade surplus recorded $39.7 billion in September, up 14 percent from the previous month, or up 31 percent from the same period last year.
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