Monday December 10 2018
China Inflation Rate Slows to 4-Month Low of 2.2% in November
National Bureau of Statistics of China l Rida | rida@tradingeconomics.com

China's consumer price inflation slowed to 4-month low of 2.2 percent year-on-year in November 2018 from 2.5 percent in the previous month and below market consensus of 2.4 percent. Food inflation hit its lowest in three months and cost of non-food increased the least in seven months.

For 2018, the Chinese government targets inflation to be around 3 percent. 

The politically sensitive food inflation eased to 3-month low of 2.5 percent from a 7-month high of 3.3 percent in October, as prices rose at a softer pace for fresh vegetables (1.5 percent vs 10.1 percent) and eggs (6.4 percent vs 8.5 percent). Meanwhile cost continued to fall for edible oil (-0.6 percent, the same as in October) and pork (-1.1 percent vs -1.3 percent). At the same time, cost of fresh fruits increased at a faster 13.3 percent (vs 11.5 percent).

Cost of non-food rose at a slower 2.1 percent, following a 2.4 percent increase in October and marking the lowest gain in 7 months. Prices eased for rent, fuel and utilities (2.4 percent vs 2.5 percent); and transport and communication (1.6 percent vs 3.2 percent), while inflation was steady for clothing (at 1.4 percent, the same as in October); education, culture and recreation (at 2.5 percent); household goods & services (at 1.5 percent); and healthcare (at 2.6 percent). On the other hand, cost increased faster for other goods and services (1.5 percent vs 1.3 percent). 

Annual core inflation, which excludes volatile items such as food and energy, stood at 1.8 percent in November, unchanged from the previous month.

On a monthly basis, consumer prices declined by 0.3 percent in November, compared with market expectations of a 0.1 percent fall and after a 0.2 percent gain in a month earlier. It marked the first monthly drop in consumer prices since June.

Meantime, the producer price index in China increased by 2.7 percent from a year earlier in November, after a 3.3 percent rise in the previous month and matching market expectations. It was the lowest producer inflation since October 2016, as prices of means of production went up at a softer 3.3 percent (vs 4.2 percent in October), namely raw materials (4.6 percent vs 6.7 percent), processing (2.2 percent vs 2.5 percent), and extraction (9.2 percent vs 12.4 percent). Meanwhile, consumer goods inflation edged up to 0.8 percent from 0.7 percent, of which food production (1.1 percent vs 0.9 percent), clothing (1.5 percent vs 1.2 percent) and daily use goods (0.8 percent vs 1.0 percent). Cost of consumer durable goods went up 0.1 percent (vs -0.1 percent in October). On a monthly basis, producer prices fell 0.2 percent, following a 0.4 percent rise in October.




Monday December 10 2018
China Trade Surplus Largest in 11 Months
Rida | rida@tradingeconomics.com

China's trade surplus widened to USD 44.74 billion in November of 2018 from USD 38.43 billion in the same month a year earlier and easily beating market consensus of USD 34 billion. It was the largest trade surplus since December 2017, as exports rose at a faster 5.4 percent year-on-year while imports went up by 3.0 percent.

Exports increased 5.4 percent year-on-year, much slower than a 15.6  percent rise in October and missing market consensus of a 10.0 percent gain. It marked the slowest growth in outbound shipments since a decline in March, amid softening global demand and uncertainty over a resolution to trade tensions with the US. Still, China's unwrought aluminium and aluminium product exports surged 41.1 percent year-on-year to 536,000 tonnes in November, and was up 11.7 percent month-on-month from a downwardly revised 480,000 tonnes in September. China is the world's top producer of steel and aluminium. The US has imposed tariffs of 25 percent on Chinese steel imports and 10 percent on aluminium imports since March 23rd. However, a lower yuan has helped Chinese metal exports. In addition, sales of rice surged 67.1 percent to 249 million tonnes. In contrast, exports of steel product fell 1 percent year-on-year to 5.3 million tonnes in November and dropped 3.7 percent from October's 5.35 million tonnes. Still, Chinese aluminium exports are expected to surge in coming months after Beijing boosted tax rebates for exports of semi-fabricated aluminium, or semis, to 16 percent from 13 percent starting from 1st November. Also, sales of crude oil plummeted 69.2 percent year-on-year to 0.26 million tonnes; and coal declined 8.1 percent to 0.69 million tonnes.

Imports rose 3.0 percent, far lower than a 21.4 percent growth in October and way below expectations of a 14.5 percent rise. It was the weakest increase in inbound shipments since October 2016. Purchases of crude oil increased 17.7 percent year-on-year to a fresh record high of 42.61 million tonnes, and rose 4.8 percent from October's 40.64 million tonnes. Also, arrivals of natural gas grew 39.8 percent year-on-year to 9.15 million tonnes, and went up 25.6 percent from October's 7.29 million tonnes. In contrast, China's unwrought copper imports declined 3.0 percent from a year earlier to 456,000 tonnes, but grew 8.6 percent from October's 420,000 tonnes. Also, imports of copper concentrate fell 4.6 percent to 1.70 million tonnes, but was up 8.9 percent from a month earlier of 1.56 million tonnes. In addition, purchases of iron ore were down 8.8 percent year-on-year to 86.25 million tonnes, and decreased 2.4 percent from October's 88.39 million tonnes. At the same time, imports of soybeans plunged 38.0 percent year-on-year to 5.38 million tonnes, and were down 22.2 percent from October's 6.92 million tonnes, as buyers avoided US soybeans amid ongoing trade row.

The trade surplus with the US, China's largest export market, widened to a fresh record high of USD 35.55 billion in October from USD 31.78 billion in September. Exports to the country rose 9.8 percent year-on-year and 8.2 percent month-over-month, while imports plummeted 25 percent compared to the same month a year ealier and 2.5 percent month-over-month. Over the first eleven months of the year, the trade surplus with the US widened markedly to USD 293.53 billion from USD 251.26 billion in the same period a year earlier.

In yuan-denominated terms, China's trade surplus came in at CNY 306.04 billion in November, as exports grew at a faster 10.2 percent, while exports went up 7.8 percent.




Friday November 09 2018
China Inflation Rate Unchanged at 7-Month High
National Bureau of Statistics of China | Rida | rida@tradingeconomics.com

China's consumer price inflation stood at 2.5 percent year-on-year in October 2018, unchanged from the previous month's seven-month high and in line with market expectations. A slowdown in prices of food was offset by a faster rise in cost of non-food products.

For 2018, the Chinese government targets inflation to be around 3 percent. 

The politically sensitive food inflation eased to 3.3 percent in October from a seven-month high of 3.6 percent in September, as prices rose at a softer pace for fresh vegetables (10.1 percent vs 14.6 percent) while declines continued to be recorded in cost of edible oil (-0.6 percent, the same as in September) and pork (-1.3 percent vs -2.4 percent). At the same time, cost of fresh fruits increased at a faster 11.5 percent (vs 10.2 percent in September) and prices of eggs went up 8.5 percent (vs 7.1 percent in September). 

Meanwhile, non-food inflation picked up to 2.4 percent in October from 2.2 percent in September. Cost went up at a faster rate for: clothing (1.4 percent vs 1.2 percent); transport and communication (3.2 percent vs 2.8 percent); education, culture and recreation (2.5 percent vs 2.2 percent); and other goods and services (1.3 percent vs 0.7 percent). At the same time, inflation slowed for: rent, fuel and utilities (2.5 percent vs 2.6 percent); household goods & services  (1.5 percent vs 1.6 percent); and healthcare (2.6 percent vs 2.7 percent).

Annual core inflation, which excludes volatile items such as food and energy, edged up to 1.8 percent in October from 1.7 percent in the previous month.

On a monthly basis, consumer prices went up 0.2 percent in October, easing from a 0.7 percent advance in September and also matching market consensus.

Meantime, the producer price index in China increased by 3.3 percent from a year earlier in October, after a 3.6 percent rise in the previous month and matching market expectations. It was the lowest producer inflation since March, as prices of means of production went up at a softer 4.2 percent (vs 4.6 percent in September), namely raw materials (6.7 percent vs 7.3 percent) and processing (2.5 percent vs 2.9 percent), while there was a pick up in extraction inflation (12.4 percent vs 11.7 percent). In addition, consumer goods inflation edged down to 0.7 percent from 0.8 percent, of which daily use goods (1 percent vs 1.1 percent), food production (0.9 percent, the same as in September) and clothing (1.2 percent vs 1.1 percent). Cost of consumer durable goods declined 0.1 percent (vs 0.2 percent in September). On a monthly basis, producer prices went up 0.4 percent, following a 0.6 percent rise in September.



Thursday November 08 2018
China October Trade Surplus Smaller than Expected
Rida | rida@tradingeconomics.com

China's trade surplus narrowed to USD 34.01 billion in October of 2018 from USD 36.89 billion in the same month a year earlier and slightly below market consensus of USD 35 bilion. Imports jumped 21.4 percent year-on-year to USD 131.83 billion while exports increased at a slower 15.6 percent to USD 159.72 billion.

Imports surged 21.4 percent year-on-year to USD 183.27 billion in October, easily beating market expectations of 14 percent and following a 14.3 percent growth in a month earlier. China's unwrought copper imports jumped 28.2 percent from a year earlier to 423,000 tonnes but slumped 18.7 percent from September's 520,000 tonnes. Also, imports of copper concentrate rose 14.5 percent to 1.57 million tonnes, but dropped 18.7 percent from a month earlier of 1.93 million tonnes. In addition, purchases of iron ore were up 11.2 percent year-on-year to 88.40 million tonnes, but were down 5.4 percent from September's 93.47 million tonnes. Imports of crude oil surged 31.5 percent year-on-year to a record high of 40.8 million tonnes, and rose 9.6 percent from September's 37.21 million tonnes. Arrivals of natural gas grew 25.6 percent year-on-year to 7.30 million tonnes, but fell 4.2 percent from September's 7.62 million tonnes. Meanwhile, imports of soybeans went up 18.1 percent year-on-year to 6.92 million tonnes, but were down 13.6 percent from September's 8.01 million tonnes. Chinese buyers have been scooping up Brazilian beans after Beijing in July imposed a 25 percent tariff on US products worth USD 34 billion, including soybeans. 

Exports rose 15.6 percent to USD 217.28 billion, after a 14.5 percent rise in September. Figure was above market consensus of a 11 percent rise, as firms increased shipments before stiffer US tariffs hit in January 2019. China's unwrought aluminium and aluminium product exports surged 37.7 percent year-on-year to 482,000 tonnes, but were down 3.6 percent month-on-month from a downwardly revised 500,000 tonnes in September. China is the world's top producer of steel and aluminium. The US has imposed tariffs of 25 percent on Chinese steel imports and 10 percent on aluminium imports since March 23rd. However, a lower yuan has helped Chinese metal exports. China's steel product exports went up 10.4 percent year-on-year to 5.50 million tonnes in October and fell 7.6 percent from a revised figure of 5.95 million tonnes in September. Chinese aluminium exports are expected to surge further in coming months after Beijing boosted tax rebates for exports of semi-fabricated aluminium, or semis, to 16 percent from 13 percent with effect from 1st November. Exports of crude oil edged up 0.3 percent year-on-year to 0.14 million tonnes; coal went up 0.1 percent to 0.48 million tonnes; and sales of rice surged 106.1 percent to 187 million tonnes.

The trade surplus with the US, China's largest export market, narrowed to USD 31.78 billion in October from a fresh record high of USD 34.13 billion in September. Exports to the country rose 13.2 percent, while imports contracted 1.8 percent. October was the first full month after the latest US tariffs went into effect. Over the first ten months of the year, the trade surplus with the US widened markedly to USD 258.15 billion from USD 222.98 billion in the same period a year earlier.


In yuan-denominated terms, China's trade surplus came in at CNY 233.63 billion in October, as imports grew at a faster 26.3 percent, while exports went up 20.1 percent.



Friday October 19 2018
China Economy Expands 1.6% QoQ in Q3
National Bureau of Statistics l Rida | rida@tradingeconomics.com

The Chinese economy grew by 1.6 percent quarter-on-quarter in the three months to September 2018, compared to a 1.8 percent expansion in the previous period and matching market estimates.

Year-on-year, the economy advanced 6.5 percent in the third quarter of 2018, after a 6.7 percent growth in the previous three quarters and missing market expectations of 6.6 percent. It was the lowest growth rate since the aftermath of the global financial crisis in the first quarter of 2009, amid intense tariff dispute with the US and and alarming off-balance-sheet borrowings by local governments.

For 2018, the Chinese government targets growth at around 6.5 percent.

In 2017, the economy expanded by 6.9 percent, beating the government target of around 6.5 percent and following a 26-year low of 6.7 percent in 2016.




Friday October 19 2018
China Q3 GDP Growth Weakest Since Global Financial Crisis
National Bureau of Statistics l Rida | rida@tradingeconomics.com

The Chinese economy advanced 6.5 percent year-on-year in the September quarter of 2018, after a 6.7 percent growth in the previous period and missing market consensus of 6.6 percent. It was the lowest growth rate since the first quarter of 2009 during global financial crisis, amid intense tariff dispute with the US and alarming off-balance-sheet borrowings by local governments.

For the first three quarters of the year, China's economy expanded 6.7 percent compared to the same period 2017, amid continued efforts to deleverage debt and contain financial risks. Recently, S&P Global Ratings said off-balance-sheet debt by Chinese local governments could now be as high as CNY 40 trillion (USD 7.95 trillion), representing a “debt iceberg with titanic credit risks”. The value added of the primary industry was up by 3.4 percent; the secondary industry by 5.8 percent; and the tertiary industry by 7.7 percent.

Industrial production rose 5.8 percent year-on-year in September of 2018, after a 6.1 percent gain in the previous month and below market estimates of 6 percent. It was the weakest reading since February 2016, mainly due to a slowdown in manufacturing output (5.7 percent vs 6.1 percent in August). Meanwhile, production growth accelerated for: mining (2.2 percent vs 2 percent) and electricity, gas and water (11 percent vs 9.9 percent). Across industries, production went up at a softer rate for: food processing industry (4.5 percent vs 6 percent); automobile (0.7 percent vs 1.9 percent); and computer, communications (12.6 percent vs 17.1 percent), while output growth was steady for non-metallic mineral products (at 5.2 percent). At the same time, production grew further for: chemicals (5 percent vs 4.8 percent); ferrous metal smelting (10.1 percent vs 9.8 percent);and machinery (5.2 percent vs 3.3 percent). Considering the first nine months 2018, industrial output increased 6.4 percent.

Retail sales increased 9.2 percent from a year earlier in September 2018, following a 9 percent rise in the previous month and beating market expectations of 9 percent. It marked the fastest growth in retail trade since April, as sales growth accelerated for: garments (9 percent vs 7 percent in August); personal care (17.4 percent vs 15.8 percent); home appliances (5.7 percent vs 4.8 percent); furniture (9.9 percent vs 9.5 percent); and building materials (8.4 percent vs 7.9 percent). In addition, sales of telecoms picked up (16.9 percent vs 6.4 percent). Meanwhile, sales of cosmetics (7.7 percent vs 7.8 percent); jewelry (11.6 percent vs 14.1 percent); office supplies (4.9 percent vs 5.4 percent); and oil, oil products (19.2 percent vs 19.6 percent) went up at softer paces; while those of automobiles continued to fall (-7.1 percent vs -3.2 percent). From January to September, retail sales grew 9.3 percent. Retail sales in rural areas increased 10.4 percent, continuing to outpace the growth in urban regions, where sales rose 9.1 percent.

China's fixed-asset investment rose 5.4 percent year-on-year in January to September 2018, after a 5.3 percent rise in previous period and slightly above expectations of 5.3 percent. Fixed-asset investment increased a bit faster for public investment (1.2 percent vs 1.1 percent in January-August) while private investment grew 8.7 percent, the same as in the prior period. By sector, FAI grew for: agriculture (9.8 percent vs 12.1 percent); manufacturing (8.7 percent vs 7.5 percent); mining (6.2 percent vs 5.9 percent); transport, storage (3.2 percent vs 3.1 percent); water, enviromental and public facilities (3.4 percent vs 2.2 percent); health (8.3 percent vs 10 percent); and culture, sports (19.3 percent vs 18.7), while fell for electricity & utilities (-10.7 percent vs -11.4 percent).

Figures released earlier showed exports increased 14.5 percent year-on-year to USD 226.69 billion in September 2018, while imports grew 14.3 percent to USD 195 billion. The nine-month period trade surplus with the US was reported at USD 225.79 billion, up 15 percent from the same period of the previous year.

For 2018, the Chinese government targets growth at around 6.5 percent, the same as in 2017.





Tuesday October 16 2018
China Inflation Rate Rises to 7-Month High in September
National Bureau of Statistics of China | Rida | rida@tradingeconomics.com

China's consumer price inflation rose to a seven-month high of 2.5 percent year-on-year in September of 2018 from 2.3 percent in the previous month and matching market consensus. Prices of food surged while cost of non-food continued to increase.

Still, inflation remained below the Chinese government’s target of around 3 percent for 2018. 

The politically sensitive food inflation picked up to a seven-month high of 3.6 percent in September from 1.7 percent in the prior month, as prices rose at a faster pace for both fresh fruits (10.2 percent vs 5.5 percent in August) and fresh vegetables (14.6 percent vs 4.3 percent). In addition, cost of eggs continued to inncrease firmly (7.1 percent vs 10.2 percent); while prices of pork declined less (-2.4 percent vs -4.9 percent). Edible oil costs continued to drop (-0.6 percent vs -0.6 percent).

Meantime, cost of non-food increased by 2.2 percent, after a 2.5 percent rise in August. Cost continued to rise for: clothing (1.2 percent vs 1.3 percent); healthcare (2.7 percent vs 4.3 percent); education, culture & recreation (2.2 percent vs 2.6 percent); and other goods & services (0.7 percent vs 1.2 percent), while inflation was unchanged for household goods & services (at 1.6 percent). At the same time, cost rose at a faster rate for: rent, fuel & utilities (2.6 percent vs 2.5 percent); and transport & communication (2.8 percent vs 2.7 percent).  

Annual core inflation, which excludes volatile items such as food and energy, slowed  to 1.7 percent in September from 2 percent in the previous month.

On a monthly basis, consumer prices went up 0.7 percent in September, the same as in August and in line with market expectations. It remained the highest monthly figure since February.

Meanwhile, the producer price index in China increased by 3.6 percent from a year earlier in September 2018, after a 4.1 percent rise in the previous month and compared to market expectations of 3.5 percent. It was the lowest reading since April, as prices of means of production went up at a softer 4.6 percent (vs 5.2 percent in August), namely extraction (11.7 percent vs 12.1 percent), raw materials (7.3 percent vs 7.8 percent) and processing (2.9 percent vs 3.5 percent). Meanwhile, consumer goods inflation edged up to 0.8 percent from 0.7 percent); of which food production (0.9 percent vs 0.7 percent); clothing (1.1 percent vs 1.1 percent), daily use goods (1.1 percent vs 1.2 percent) and consumer durable goods (0.2 percent vs 0.2 percent). On a monthly basis, producer prices went up 0.6 percent.


Friday October 12 2018
China Trade Surplus Largest in 3 Months
Rida | rida@tradingeconomics.com

China's trade surplus widened to USD 31.69 bilion in September of 2018 from USD 27.38 billion in the same month a year earlier and easily beating market consensus of USD 19.4 bilion. It was the largest trade surplus since June, as exports increased at a faster 14.5 percent year-on-year to USD 226.5 billion, while imports grew by 14.3 percent to USD 189.49 billion.

Exports rose at  a stronger 14.5 percent  year-on-year to USD 226.6 billion in September, after a 9.8 percent rise in the previous month. It was the fastest growth in outbound shipments since February, despite intense trade tensions with the US. The Trump administration has imposed tariffs on USD 250 billion of Chinese goods so far this year and Beijing has retaliated with punitive taxes on USD 110 billion of US products. President Trump has also pledged to put more tariffs on an additional USD 257 billion of Chinese products. Still, China's export data has been resilient to tariffs, possibly as companies increased shipments before tariffs go into effect. Unwrought aluminium and aluminium product exports surged 37 percent year-on-year to 507,000 tonnes, but were down 0.6 percent month-on-month from a downwardly revised 510,000 tonnes in August, which remained the second-highest on record. China is the world's top producer of steel and aluminium. The US has imposed tariffs of 25 percent on Chinese steel imports and 10 percent on aluminium imports since March 23rd. However, a lower yuan has helped Chinese metal exports. China's steel product exports went up 15.8 percent year-on-year to 5.95 million tonnes in September and was up 1.4 percent from a revised figure of 5.87 million tonnes in August. Chinese aluminium exports are expected to surge further in coming months after Beijing boosted tax rebates for exports of semi-fabricated aluminium, or semis, to 16 percent from 13 percent with effect from 1st November.

Imports expanded 14.3 percent to USD 189.49 billion, compared to a 20 percent advance in a month earlier and slightly below estimates of 15 percent. China's unwrought copper imports jumped 21.2 percent from a year earlier to 521,000 tonnes and soared 24 percent from August's 420,000 tonnes, reaching the highest since March of 2016. Also, imports of copper concentrate rose 21.2 percent to an all-time high of 1.93 million tonnes, and grew 16.3 percent from a month earlier of 1.66 million tonnes. On the other hand, purchases of iron ore fell 9.5 percent year-on-year to 93.08 million tonnes, but were up 4.2 percent from August's 89.34 million tonnes as steel mills increased output ahead of winter production restrictions. Natural gas imports came in at 7.62 million tonnes in September, down from 7.76 million tonnes in August. Meanwhile, imports of soybeans were little changed  year-on-year at 8.01 million tonnes (vs 8.11 million tonnes in September 2017). Chinese buyers have been scooping up Brazilian beans after Beijing in July imposed a 25 percent tariff on US products worth USD 34 billion, including soybeans. 

The trade surplus with the US, China's largest export market, widened to a fresh record high of USD 34.13 billion in September from USD 31.05 billion in August. Exports to the country rose 13 percent, while imports increased 9 percent.

Over the first nine months of the year, the trade surplus decreased to USD 225.7 billion from USD 303.43 billion in the same period 2017. The nine-month period trade surplus with the US was reported at USD 225.79 billion, up 15 percent from the same period of the previous year.

In yuan-denominated terms, China's trade surplus came in at CNY 213.23 billion in September, as imports grew at a faster 17.4 percent, while exports went up 17 percent. For January-September, the trade surplus narrowed 28.3 percent to CNY 1.44 trillion, as imports jumped 14.1 percent while exports were up 6.5 percent.


Monday September 10 2018
China Inflation Rate Rises to 6-Month High in August
National Bureau of Statistics of China | Rida | rida@tradingeconomics.com

China's consumer price inflation rose to a six-month high of 2.3 percent year-on-year in August of 2018 from 2.1 percent in the previous month and slightly above market consensus of 2.2 percent. The increase was driven by higher prices of food; clothing; rent, fuel & utilities; and education, culture & recreation.

Still, inflation remained well below the Chinese government’s target of around 3 percent for 2018. 

The politically sensitive food inflation picked up to a five-month high of 1.7 percent in August from 0.5 percent in the prior month, as prices rose at a faster pace for both fresh fruits (5.5 percent vs 0.4 percent in July) and fresh vegetables (4.3 percent vs 3.8 percent). In addition, cost of eggs continued to increase firmly (10.2 percent vs 11.7 percent), as well as poultry prices (5.5 percent vs 6.6 percent); while pork price deflation eased further (-4.9 percent vs -9.6 percent) despite concerns on a series of African swine fever outbreaks. Edible oil costs also dropped (-0.6 percent vs -0.7 percent).

Additional upward pressure came from: clothing (1.3 percent vs 1.2 percent); rent, fuel & utilities (2.5 percent vs 2.4 percent); and education, culture & recreation (2.6 percent vs 2.3 percent). Meanwhile, inflation was unchanged for both household goods & services (at 1.6 percent) and other goods & services (at 1.2 percent), but eased for transport & communication (2.7 percent vs 3 percent) and healthcare (4.3 percent vs 4.6 percent). 

Annual core inflation, which excludes volatile items such as food and energy, picked up  to 2 percent in August from 1.9 percent in the previous month.

On a monthly basis, consumer prices went up 0.7 percent in August, following a 0.3 percent rise in July and beating market expectations of 0.5 percent. It was the highest monthly rate since February.

Meanwhile, the producer price index increased by 4.1 percent from a year earlier in August, after a 4.6 percent rise in the previous month and compared to market expectations of 4 percent. Prices of means of production went up 5.2 percent (vs 6 percent in July), namely extraction (12.1 percent vs 13.4 percent), raw materials (7.8 percent vs 9 percent) and processing (3.5 percent vs 4.1 percent). Meanwhile, consumer goods inflation edged up to 0.7 percent from 0.6 percent, led by clothing (1.1 percent vs 0.7 percent), daily use goods (1.2 percent vs 1.1 percent) and consumer durable goods (0.2 percent vs -0.2 percent) while inflation was unchanged for food production (at 0.7 percent). On a monthly basis, producer prices went up 0.4 percent.


Monday September 10 2018
China August Trade Surplus Smaller than Estimated
Rida | rida@tradingeconomics.com

China's trade surplus narrowed sharply to USD 27.91 billion in August of 2018 from USD 40.05 billion in the same month a year earlier and missing market consensus of USD 39.3 billion. Imports jumped 20 percent to USD 185.56 billion while exports rose at a softer 9.8 percent to USD 210.08 billion.

Imports climbed 20 percent from a year earlier to an all-time high of USD 189.52 billion in August, beating market forecasts of 18.7 percent and following a 27.3 percent growth in July. China's unwrought copper imports rose 7.7 percent from a year earlier to 420,000 tonnes and were down 6.7 percent from July's 450,000 tonnes. Also, imports of copper concentrate rose 15.4 percent to 1.66 million tonnes, but declined by 9.7 percent from a month earlier of 1.84 million tonnes. Crude shipments increased 12.9 percent to 38.38 million tonnes, and also grew 6.6 percent from the previous month's reading of 36.01 million tonnes, boosted by a rebound in demand from smaller, independent refiners. Natural gas imports were at 7.77 million tonnes in August, up 37.3 percent year-on-year and up 5.4 percent from 7.37 million in July, as state-owned enterprises stock up ahead of winter. China's coal imports went up 13.5 percent year-on-year to 28.68 million tonnes, but were slightly below July's figure of 28.68 million tonnes. Imports of iron ore were up 0.8 percent from the prior year to 89.3 million tonnes, but were down by 0.7 percent from July's 89.95 million tonnes due to continued anti-pollution measures and environmental inspections. In addition, imports of soybeans surged 8.3 percent from the prior year to 9.15 million tonnes, and were higher than July's 8.00 milion tonnes, as buyers continued to buy from Brazil after Beijing imposed tariffs on US shipments. China imposed a 25 percent tariff on a list of American products totalling USD 34 billion, including soybeans, on July 6th, in response to US penalties on Chinese goods worth the same amount.

Exports rose at a softer 9.8 percent to USD 217.43 billion, after a 12.2 percent gain in July and slightly below expectations of 10.1 percent. It was the smallest increase in exports since March amid an escalating trade dispute between China and the US, with President Donald Trump recently threatening to impose duties on another USD 267 billion of Chinese goods. Unwrought aluminium and products exports jumped 26.1 percent year-on-year to 517,000 tonnes and were up 1.4 percent from July's 510,000 tonnes. In addition, sales of rice surged 279.3 percent to 258,000 tonnes, and were also 17.3 percent higher from 220,000 tonnes in July. Meanwhile, exports of steel products fell 9.9 percent to 5.88 million tonnes from 6.52 million tonnes last year, as the world's top producer of steel and aluminium has been subject to 25 percent steel and 10 percent aluminium import tariffs, in the United States, since March 23rd.

The trade surplus with the US, China's largest export market, widened to a fresh record high of USD 31.05 billion in August from USD 28.09 billion in July. Exports to the country rose 13.2 percent even with US tariffs targeting USD 50 billion of Chinese exports in effect for their first full month in August, while imports increased only by 2.7 percent.

Over the first eight months of the year, the trade surplus decreased to USD 194.01 billion from USD 263.00 billion in the same period 2017. The eight-month period trade surplus with the US was reported at USD 192.64 billion, up 15 percent from the same period of the previous year.

In yuan-denominated terms, China's trade surplus came in at CNY 179.75 billion in August, as imports jumped 18.8 percent and exports went up 7.9 percent. For January-August, the trade surplus narrowed 31.3 percent to CNY 1.25 trillion, as imports grew 13.7 percent and exports were up 5.4 percent.