9 Jun 2015
China's trade data should not lead to PBOC policy changes - RBS
FXStreet (Bali) - According to Louis Kuijs, Chief Economist, Greater China, at RBS, notes that Monday's Chinese trade data, in which imports disappointed again, should not lead to change in policy stance by the PBOC.
Key Quotes
"China’s exports continue to be heavily affected by global exchange rate swings. On our estimates, shipments out of China rose around 3% yoy in real terms in May."
"While this implies little loss of global market share, it is at a cost of squeezing profitability in export-oriented manufacturing. Meanwhile, the momentum of imports into China’s own economy remains very weak."
"China’s import data suggest that domestic demand momentum remains weak. Imports posted a significant decline of 17.6% yoy in USD terms, from April’s 16.2% decrease."
"On our estimate, around 13% of this can be attributed to sharply falling import prices, suggesting that overall imports fell by around 4% yoy in real terms in May."
"Imports used in China’s own economy – “normal imports” – fell by a broadly similar 4% yoy in real terms in May, according to our estimates, suggesting that domestic demand momentum has remained weak through May."
"Going forward, we do not expect this kind of data to lead to a change in economic policy. Instead, we continue to expect no adjustment in FX policy and more efforts to support domestic demand.'
Key Quotes
"China’s exports continue to be heavily affected by global exchange rate swings. On our estimates, shipments out of China rose around 3% yoy in real terms in May."
"While this implies little loss of global market share, it is at a cost of squeezing profitability in export-oriented manufacturing. Meanwhile, the momentum of imports into China’s own economy remains very weak."
"China’s import data suggest that domestic demand momentum remains weak. Imports posted a significant decline of 17.6% yoy in USD terms, from April’s 16.2% decrease."
"On our estimate, around 13% of this can be attributed to sharply falling import prices, suggesting that overall imports fell by around 4% yoy in real terms in May."
"Imports used in China’s own economy – “normal imports” – fell by a broadly similar 4% yoy in real terms in May, according to our estimates, suggesting that domestic demand momentum has remained weak through May."
"Going forward, we do not expect this kind of data to lead to a change in economic policy. Instead, we continue to expect no adjustment in FX policy and more efforts to support domestic demand.'