Thursday May 09 2019
China Inflation Rate Rises to 6-Month High
Statistics China | Rida Husna | rida@tradingeconomics.com

China's consumer price inflation rose to 2.5 percent year-on-year in April 2019 from 2.3 percent in the previous month, matching market consensus. This was the highest rate since October last year, with food cost rising the most in three years as an outbreak of African swine fever sent pork prices soaring further.

The politically sensitive food inflation jumped to a three-year high of 6.1 percent in April from 4.1 percent in March, as prices of pork surged 14.4 percent, the second straight month of increase in over two years, after a 5.1 percent gain in March. In addition, prices increased sharply for fresh vegetables (17.4 percent vs 16.2 percent), fresh fruit (11.9 percent vs 7.7 percent), and eggs (3.7 percent vs -1.9 percent). At the same time, cost of edible oil fell at a softer rate (-0.3 percent vs -0.4 percent).

Non-food price inflation came in at 1.7 percent in April, little-changed from the prior's month 1.8 percent. Prices rose at softer pace for clothing (1.8 percent vs 2 percent); rent, fuel & utilities (2 percent vs 2.1 percent); household goods & services (1.1 percent vs 1.2 percent); and healthcare (2.6 percent vs 2.7 percent). Meanwhile, inflation was unchanged for other goods & services (at 1.9 percent) and picked up for education, culture & recreation (2.5 percent vs 2.4 percent). Transport & communication prices fell 0.5 percent, after a 0.1 percent gain in March.

Annual core inflation, which strips out volatile food and energy prices, edged down to 1.7 percent in April, the lowest in seven months, from 1.8 percent in March.

On a monthly basis, consumer prices increased by 0.1 percent in April, reversing a 0.4 percent fall in March and also in line with expectations.

Meanwhile, China's producer price index increased by 0.9 percent from a year earlier in April, accelerating from a 0.4 percent rise in the previous month and beating market expectations of a 0.6 percent gain. Prices of means of production picked up firmly (0.9 percent vs 0.3 percent), with cost increasing faster for both processing (0.9 percent vs 0.4 percent) and extraction (5.3 percent vs 4.2 percent), while prices of raw materials were flat (vs -0.6 percent in March). In addition, consumer goods inflation surged to 0.9 percent from 0.5 percent, of which food productions (1.9 percent vs 1.2 percent), clothing (at 1.7 percent) and daily use goods (at 0.3 percent), while prices dropped at a slower rate for durable goods (-0.6 percent vs -0.7 percent). On a monthly basis, producer prices rose 0.3 percent in April, following a 0.1 percent gain in March.




Wednesday May 08 2019
China April Trade Surplus Far Below Estimates
General Administration of Customs l Rida Husna | rida@tradingeconomics.com

China's trade surplus fell to USD 13.84 billion in April 2019 from USD 26.21 billion in the same month a year earlier and missing market consensus of a surplus of USD 35.0 billion. Year-on-year, imports advanced 4.0 percent to USD 179.65, while export fell 2.7 percent to USD 193.49 billion. The trade surplus with the US, China's largest export market, was at USD 21.01 billion in April, little-changed from a surplus USD 20.50 billion in March.

Imports surprisingly rose by 4 percent year-on-year to USD 179.65 billion in April, against market expectations of a 3.6 percent fall and reversing from a 7.6 percent drop in the previous month. This marked the first yearly increase in inbound shipments since November last year. Purchases of crude oil surged 11 percent year-on-year to a record high of 43.73 million tonnes, equal to 10.64 million barrels per day/bpd, and rose by 15 percent from March's 9.26 million bpd. Also, total natural gas imports went up 12 percent year-on-year to 7.65 million tonnes, and grew by 10.2 percent from March's 6.94 million tonnes. In addition, inbound shipments of soybeans expanded 10.7 percent from the prior year to 7.64 million tonnes, with buyers delaying cargoes to arrive in April to take advantage of a cut in the value-added tax/VAT on agricultural products effective from 1st April; and soared 55 percent month-over-month from 4.92 million in March. As part of a trade conflict with the US, China slapped a 25 percent tariff on US soybeans last July. The US and Brazil were the two largest suppliers of soybeans to China until the start of the trade row. In contrast, China's iron ore imports fell to the lowest in 1-1/2 years, as poor weather in Brazil, the country's second-largest supplier, disrupted shipments; and as some mining production halted their production following recent accident. Inbound shipments of coal went up 13.6 percent to 25.3 million tonnes. Additionally, purchases of unwrought copper decreased 8.4 percent to 405,000 tonnes, but rose 3.6 percent from the prior's month 391,000 tonnes.

Among China's biggest trade partners, purchases grew mainly from Japan (1.4 percent), the EU (4.4 percent), Australia (18 percent) and the ASEAN countries (10.4 percent), while contracted from the US (-25.7 percent), South Korea (-2.4 percent), and Taiwan (-6.8 percent).

Exports unexpectedly declined by 2.7 percent to USD 193.49 billion, swinging from a 14.2 percent jump in the previous month and missing market estimates of a 2.3 percent growth. The latest reading on overseas sales reflected weakening global demand as well as renewed trade dispute with the US, at which higher tariffs on USD 200 billion worth of Chinese goods will soon take effect. Sales of steel products fell 2.3 percent to 6.33 million tonnes and were unchanged from the previous month. Additionally, exports of coal declined 2.0 percent to 0.50 million tonnes, and dropped 12.3 percent from March's 0.57 million tonnes. Meanwhile, sales of unwrought aluminium and aluminium products went up 10.4 percent from a year earlier to 498,000 tonnes in March, but declined 8.8 percent from February's 546,000 tonnes. Also, exports of rice jumped 112.7 percent to 357,000 tonnes and climbed 84.7 percent from the prior month's 190,000 tonnes. 

Sales declined to the US (-13.2 percent), Japan (-16.4 percent), South Korea (-7.7 percent), and Australia (-13.8 percent), while went up to Taiwan (4.6 percent), the EU (6.2 percent), and the ASEAN countries (0.4 percent).

For the January to April period, the trade surplus with the US was recorded at USD 83.66 billion.
Considering the first four months of the year, China's trade surplus widened to USD 90.16 billion from USD 70.94 billion in the corresponding period 2018.

In yuan-denominated terms, China's trade surplus came in at CNY 93.57 billion in April, as exports grew by 3.1 percent while imports expanded at a faster 10.3 percent.




Wednesday April 17 2019
China Quarterly GDP Growth Weakest in 3 Years
Statistics China l Rida Husna | rida@tradingeconomics.com

The Chinese economy grew by 1.4 percent quarter-on-quarter in the three months to March 2019, compared to a 1.5 percent expansion in the previous period and in line with market estimates. It was the weakest quarterly growth rate since the first quarter of 2016.

Year-on-year, the economy advanced 6.4 percent in the three months to March 2019, the same pace as in the previous period and slightly above market expectations of a 6.3 percent expansion. It remained the lowest growth rate since the global financial crisis, amid intense trade conflict with the US, softening domestic demand and alarming off-balance-sheet borrowings by local governments.




Wednesday April 17 2019
China Q1 GDP Growth Beats Estimates
Statistics China l Rida Husna | rida@tradingeconomics.com

The Chinese economy advanced 6.4 percent year-on-year in the March quarter of 2019, the same pace as in the previous quarter but slightly above market expectations of a 6.3 percent expansion. Industrial output growth accelerated markedly and consumer demand strengthened amid government's pro-growth policies, which helped stabilize sentiments rattled by trade dispute with the US.

The latest GDP reading remained at its lowest since the Global Financial Crisis, with financial risks mounting from alarming off-balance-sheet borrowings by local governments. The value added of the tertiary industry, which accounted for 57.3 percent of the GDP, was up by 7 percent, expanding by 0.6 percentage points compared with Q1 2018; the industrial sector grew by 6.1 percent and the agricultural by 2.7 percent. Consumption continued to be the mainstay in driving up demand, contributing 65.1 percent to Q1 economic growth.

Industrial output rose by 8.5 percent year-on-year in March, easily beating market consensus of a 5.9 percent increase and accelerating from a 5.3 percent rise in the previous period. It was the biggest gain in industrial output since July 2014, when the reading showed a 9 percent growth. Output expanded at a stronger rate for all components: manufacturing (9 percent vs 5.6 percent in January-February), utilities (7.7 percent vs 6.8 percent), and mining (4.6 percent vs 0.3 percent). By industry, production rose faster for: transport equipment (13.6 percent vs 7.9 percent); machinery (15.2 percent vs 8 percent); non-metal minerals (15.4 percent vs 8.8 percent); textiles (9 percent vs 0.2 percent); general equipment (14.1 percent vs 4.4 percent); communication (10.2 percent vs 6 percent); ferrous metals (8.5 percent vs 7.5 percent); chemicals (7.1 percent vs 4.3 percent); and power equipment (7.2 percent vs 6.1 percent). Considering the first three months of 2019, industrial production expanded 6.5 percent compared to the same period a year earlier.

Retail sales increased by 8.7 percent year-on-year in March, faster than a 8.2 percent gain in the prior period and above market expectations of a 8.4 percent gain. It was the largest rise in retail trade since September last year, as sales advanced further for garments (6.6 percent vs 1.8 percent in January-February); cosmetics (14.4 percent vs 8.9 percent); personal care (16.6 percent vs 15.9 percent); home appliances (15.2 percent vs 3.3 percent); furniture (12.8 percent vs 0.7 percent); oil & oil products (7.1 percent vs 2.5 percent); telecoms (13.8 percent vs 8.2 percent); and building materials (10.8 percent vs 6.6 percent). In contrast, sales fell for both jewelry (-1.2 percent vs 4.4 percent), and office supplies (-4 percent vs 8.8 percent). Considering the first quarter of 2019, retail sales grew by 8.3 percent from the corresponding period a year earlier.

From January to March, fixed-asset investment advanced 6.3 percent from a year earlier, stronger than a 6.1 percent growth in the preceding quarter and in line with market consensus. Public investment rose further (6.7 percent vs 5.5 percent in January-February) while private investment growth eased (6.4 percent vs 7.5 percent). By sector, fixed-asset investment rebounded for both utilities (0.7 percent vs -1.4 percent) and water conservancy, environment and public facilities management (1.0 percent vs -0.4 percent). Meanwhile, fixed-asset investment growth slowed for: mining (14.8 percent vs 41.4 percent); transport, storage and postal industry (6.5 percent vs 7.5 percent); agriculture, forestry, animal husbandry; fishery (2.8 percent vs 4.0 percent), and manufacturing (4.6 percent vs 5.9 percent).

Figures released earlier showed China's exports grew 0.9 percent in the first quarter, while imports shrank 4.4 percent.

On a quarter-on-quarter basis, the economy  expanded 1.4 percent in the first quarter, compared to a 1.5 percent growth in the previous period and matching  market estimates. This was the weakest pace of quarterly expansion  in three years.





Friday April 12 2019
China March Trade Surplus Beats Expectations
General Administration of Customs l Rida Husna | rida@tradingeconomics.com

China's trade balance shifted to a USD 32.64 billion surplus in March 2019 from a USD 5.77 billion deficit in the same month a year earlier and easily beating market estimates of a USD 7.05 billion surplus, as exports soared while imports fell. Considering the first quarter of the year, the trade surplus widened sharply to USD 76.3 billion from USD 54.6 billion in the same period the prior year, as exports grew 1.4 percent and imports shrank 4.8 percent.

Exports rose 14.2 percent from a year earlier to USD 198.7 billion in March, rebounding from a marginally revised 20.8 percent fall in February, which was the steepest drop in three years, and beating market expectations of a 7.3 percent advance. The upturn came in amid improving global demand, trade talk optimism and after a Lunar New Year holiday. China's unwrought aluminium and aluminium product exports went up 21.3 percent from a year earlier to 546,000 tonnes in February and advanced 60.6 percent from January's revised figure of 340,000 tonnes. Also, sales of steel products increased 12 percent to 6.33 million tonnes and were up 40.3 percent from the prior month's 4.51 million tonnes. Additionally, sales of coal jumped 169 percent to 0.57 million tonnes, but dropped 13.1 percent from February's 0.65 million tonnes. Exports of rice surged 90 percent to 190,000 tonnes and were up 35.7 percent from the previous month's 140,000 tonnes. 

Among China's biggest trade partners, exports rose to the EU (8.8 percent), ASEAN countries (9.8 percent), Taiwan (11.5 percent), South Korea (5.7 percent), Japan (2.6 percent), and Australia (9.7 percent), but fell to the US (-8.5 percent).

Imports dropped 7.6 percent to USD 166 billion in March, worse than market expectations of a 1.3 percent fall and after a 5.2 percent decline in the previous month. This was the fourth straight month of decline in inbound shipments, suggesting the country's domestic demand remains weak, as purchases of soybeans decreased 13.1 percent to 4.92 million tonnes, amid higher tariff imposed on shipments from the US. Still, when compared to February's 4.45 million tonnes, soybean imports rose 10.5 percent. In addition, purchases of unwrought copper fell 9.1 percent to 391,000 tonnes, but increased 26.1 percent from the prior month's 310,000 tonnes. Also, imports of steel products dropped 26.9 percent to 0.90 million tonnes but increased 11 percent from the previous months's 0.81 million tonnes. Inbound shipments of coal fell 12.1 percent to 23.48 million tonnes, but surged 33.1 percent from the prior month's 17.64 million tonnes. In contrast, imports of iron ore went up 0.8 percent to 86.42 million tonnes and advanced 4 percent from February's 83.08 million tonnes. Additionally, purchases of copper concentrate advanced 10.4 percent to 1.767 million tonnes, but declined 8 percent month-on-month. Inbound shipments of crude oil grew 0.4 percent from a year ago to 39.34 million tonnes and advanced 0.3 percent from the previous months's 39.23 million tonnes. Also, natural gas imports increased 16.4 percent to 6.94 million tonnes, but dropped 8.2 percent from 7.56 million tonnes in February. 

Imports went down mainly from the US (-31.8 percent), ASEAN countries (-5.3 percent), South Korea (-13.5 percent), Japan (-6.1 percent) and Taiwan (-6.1 percent), but rose from the EU (1.8 percent) and Australia (4.1 percent).

The trade surplus with the US, China's largest export market, narrowed to USD 20.5 billion in March from  USD 14.72 billion in the previous period. For the January to March period, the trade surplus with the US was recorded at USD 62.66 billion.

In yuan-denominated terms, China's trade surplus came in at CNY 220 billion in March, with exports soaring 21.3 percent while imports declining 1.8 percent.

Big fluctuations in January to March China's trade data are mostly due to a Lunar New Year holiday.


Thursday April 11 2019
China Inflation Rate Rises to 5-Month High
National Bureau of Statistics of China | Rida Husna | rida@tradingeconomics.com

China's consumer price inflation rose to 2.3 percent year-on-year in March 2019 from 1.5 percent in the previous month, in line with market consensus. This was the highest rate since October last year, mainly due to a surge in prices of food as an outbreak of African swine fever sent the price of pork soaring.

The politically sensitive food inflation rose to a 13-month high of 4.1 percent in March from 0.7 percent in the preceding month, as pork prices surged 5.1 percent, the first month of increase in over two years, after a 4.8 percent slump in February. In addition, prices of fresh vegetables jumped (16.2 percent vs 1.7 percent in February) and those of fresh fruit went up much faster (7.7 percent vs 4.8 percent); while prices continued to fall for eggs (-1.9 percent vs -4.7 percent) and edible oil (-0.4 percent vs -0.3 percent).

Cost of non-food rose 1.8 percent in March, little-changed from the previous month's 1.7 percent gain. Main upward pressure came from transport & communication (0.1 percent vs -1.2 percent), while inflation was unchanged for both clothing (at 2 percent) and education, culture & recreation (at 2.4 percent). Meanwhile, prices rose at a slower pace for: rent, fuel & utilities (2.1 percent vs 2.2 percent); household goods & services (1.2 percent vs 1.3 percent); healthcare (2.7 percent vs 2.8 percent); and other goods & services (1.9 percent vs 2 percent).

Annual core inflation, which strips out volatile food and energy prices, stood at 1.8 percent in March, the same as in February.

On a monthly basis, consumer prices fell 0.4 percent in March, after an increase of 1 percent in February and compared to market expectations of a 0.2 percent drop.

Meanwhile, China's producer price index increased by 0.4 percent from a year earlier in March, accelerating from a 0.1 percent gain in the previous month and matching market expectations. Producer inflation picked up for the first time in nine months boosted by a rebound in prices of means of production (0.3 percent vs -0.1 percent), with cost increasing faster for both processing (0.4 percent vs 0.3 percent) and extraction (4.2 percent vs 1.8 percent) and despite a further decline in prices of raw materials (-0.6 percent vs -1.5 percent). In addition, consumer goods inflation edged up to 0.5 percent from 0.4 percent, of which daily use goods (0.3 percent vs 0.2 percent), food production (1.2 percent vs 0.8 percent), and clothing (1.7 percent vs 1.6 percent), while prices dropped further for durable goods (-0.7 percent vs -0.6 percent). On a monthly basis, producer prices went up 0.1 percent in March, the first increase in five months, following a 0.1 percent drop in February.


Monday March 11 2019
China Inflation Rate Slows to 13-Month Low of 1.5% in February
Statistics China l Rida Husna | rida@tradingeconomics.com

China's consumer price inflation fell to 1.5 percent year-on-year in February 2019 from 1.7 percent in the previous month and matching market consensus. This was the lowest inflation rate since January last year, mainly due to a marked slowdown in prices of food.

The politically sensitive food inflation eased to a seven-month low of 0.7 percent in February from 1.9 percent in the preceding month, as prices rose at a softer pace for: fresh vegetables (1.7 percent vs 3.8 percent in January), and fresh fruit (4.8 percent vs 5.9 percent); while cost fell for:  eggs (-4.7 percent vs 0.3 percent); pork (-4.8 percent vs -3.2 percent); and edible oil (-0.3 percent, the same as in January).

Cost of non-food rose 1.7 percent in February unchanged from a month earlier. Prices advanced further for clothing (2.0 percent vs 1.6 percent); and healthcare (2.8 percent vs 2.7 percent) and cost of transport and communication fell less (-1.2 percent vs -1.3 percent). On the other hand, prices slowed for household goods and services (1.3 percent vs 1.5 percent); education, culture and recreation (2.4 percent vs 2.9 percent); and other goods and services (2.0 percent vs 2.3 percent). Also, inflation was steady for rent, fuel & utilities (2.2 percent, the same as in January).

Annual core inflation, which strips out volatile food and energy prices, edged down to 1.8 percent in February from 1.9 percent the previous month.

On a monthly basis, consumer prices went up 1.0 percent in February, after a 0.5 percent rise in January and above market expectations of 0.7 percent gain. It marked the highest monthly figure in a year.

Meantime, China's producer price index increased by 0.1 percent from a year earlier in February 2019, unchanged from the January's 28-month low figure and below market estimates of 0.2 percent. Prices of means of production continued to fall (-0.1 percent, the same as in January), namely raw materials (-1.5 percent vs -1.6 percent), while inflation was steady for processing (at 0.3 percent) and  cost of extraction rose further (1.8 percent vs 1.2 percent). In addition, consumer goods inflation edged down to 0.4 percent from 0.6 percent, of which daily use goods (0.2 percent vs 0.3 percent); durable goods (-0.6 percent vs a flat reading); food production (0.8 percent, the same as in January), and clothing (1.6 percent, the same as in January). On a monthly basis, producer prices fell 0.1 percent in February, following a 0.6 percent fall in January and marking the fourth straight month of drop.


Friday March 08 2019
China Trade Surplus Smallest in 11 Months
General Administration of Customs | Rida Husna | rida@tradingeconomics.com

China's trade surplus plunged to USD 4.12 billion in February 2019 from USD 32.3 billion in the same month a year earlier, missing market forecasts of USD 26.38 billion. It was the smallest trade surplus since a rare deficit in March 2018, as exports fell the most in three years and imports dropped for a third straight month. The trade surplus with the US, China's largest export market, narrowed sharply to USD 14.72 billion in February from USD 27.30 billion in January.

Exports tumbled 20.7 percent year-on-year to USD 135.24 billion in February, far worse than market expectations of a 4.8 percent decline and after a revised 9.3 percent growth in the previous month. This was the largest yearly decline in overseas sales since February 2016, amid weakening global demand, ongoing trade tensions with the US and a series of Lunar New Year holidays which started in early February. China's unwrought aluminium and aluminium product exports fell 7.3 percent year-on-year to a two-year low of 343,000 tonnes and plummeted 37.6 from January's record high of 550,000. Also, sales of steel products dropped 6.8 percent to 4.51 million tonnes and were down 27 percent from the prior month's 6.18 million tonnes. In addition, sales of rare earths tumbled 35.2 percent to 2,886 million tonnes and were down 23.1 percent from 3,752 million tonnes in a month earlier. In contrast, China's coal exports jumped 42.8 percent to 0.66 million tonnes in February and grew 9.5 percent from January's 0.6 million tonnes. Also, sales of coke & semi-coke advanced 7.5 percent to 0.69 million tonnes but were down 3.1 percent from the prior month's 0.71 million tonnes. Sales of rice soared 62.2 percent to 146,000 tonnes, and grew 4.3 percent from the previous month's 140,000 tonnes.

Among China's biggest trade partners, exports plunged to the US (-28.6 percent), the EU (-13.2 percent), ASEAN countries (-13.2 percent), Japan (-9.5 percent), South Korea (-6.9 percent), Taiwan (-7.3 percent) and Australia (-15.9 percent).

Imports dropped 5.2 percent to USD 131.12 billion, the third straight month of decline, compared to maket consensus of a 1.4 percent fall and following January's 1.5 percent decrease. Purchases of soybeans dropped 17.8 percent year-on-year to a four-year low of 4.46 million tonnes, and slumped 39.5 percent from January's 7.37 million tonnes, amid higher tariff imposed on shipments from the US. Also, imports of coal fell 15.6 percent to 17.64 million tonnes and tumbled 47.3 percent from the prior months' 33.50 million tonnes. Purchases of iron ore declined 1.4 percent to a ten-month low of 83.08 million tonnes and were down 9 percent from January's 91.26 million tonnes. Inbound shipments of steel products fell 19.7 percent to 0.82 million tonnes and decreased 30 percent from the prior month's 1.17 million tonnes. In addition, imports of unwrought copper dropped 11.1 percent to an 11-month low of 311,000 tonnes and slumped 33.8 percent from January's 470,000 tonnes. In contrast, imports of crude oil grew 21.6 percent to 39.23 million tonnes but were down 7.9 percent from 42.59 million tonnes in January. Also, purchases of copper ores & concentrates advanced 32.8 percent to 1.93 million tonnes, tying the all-time record set in September, and were up 1.9 percent from the prior month's 1.89 million tonnes.

Imports fell mainly from the US (-26.2 percent), ASEAN countries (-9.9 percent), South Korea (-15.9 percent), and Taiwan (-5.6 percent), but rose from the EU (2.5 percent), Japan (0.2 percent) and Australia (3.9 percent).

Considering January-February combined, the trade surplus declined nearly 14 percent from the same period a year ago to USD 43.71 billion, with exports and imports falling 4.6 percent and 3.1 percent respectively.

In yuan-denominated terms, China's trade surplus came in at CNY 34.47 billion in February, with exports and imports dropping 16.6 percent and 0.3 percent respectively.


Friday February 15 2019
China Inflation Rate Lowest in a Year
Statistics China | Rida Husna | rida@tradingeconomics.com

China's consumer price inflation slowed to 1.7 percent year-on-year in January 2019 from 1.9 percent in the previous month and below market consensus of 1.9 percent. It was the lowest inflation rate since January 2018, as food prices rose at softer pace.

The politically sensitive food inflation eased to a five-month low of 1.9 percent in January from 2.5 percent in the preceding month, as prices rose at a softer pace for: fresh vegetables (3.8 percent vs 4.2 percent in December), fresh fruit (5.9 percent vs 9.4 percent) and eggs (0.3 percent vs 0.7 percent); while cost continued to fall for both edible oil (-0.3 percent vs -0.3 percent) and pork (-3.2 percent vs -1.5 percent). 

Cost of non-food rose 1.7 percent in January, the same as in a month earlier. Prices continued to increase for: clothing (1.6 percent vs 1.5 percent); rent, fuel & utilities (2.1 percent vs 2.2 percent); household goods and services (1.5 percent vs 1.4 percent); education, culture and recreation (2.9 percent vs 2.3 percent); healthcare (2.7 percent vs 2.5 percent); and other goods and services (2.3 percent vs 1.6 percent). At the same time, cost of transport and communication fell further (-1.3 percent vs -0.7 percent).

Annual core inflation, which strips out volatile food and energy prices, edged up to 1.9 percent in January, the highest since August, from 1.8 percent the previous month.

On a monthly basis, consumer prices went up 0.5 percent in January, after being unchanged in December and matching market estimates. It was the highest monthly rate in four months.

Meantime, China's producer price index increased by 0.1 percent from a year earlier in January, far slower than a 0.9 percent rise in the previous month and slightly below market expectations of 0.2 percent. It was the lowest producer inflation since September 2016, amid a slight decline in prices of means of production (-0.1 percent vs 1 percent), such as raw materials (-1.6 percent vs 0.8 percent), while inflation slowed for processing (0.3 percent vs 0.8 percent) and extraction (1.2 percent vs 3.8 percent). At the same time, consumer goods inflation edged down to 0.6 percent from 0.7 percent, of which food production (0.8 percent vs 0.9 percent), clothing (1.6 percent, the same as in December) and daily use goods (0.3 percent vs 0.4 percent). The cost of consumer durable goods was flat, following a 0.2 percent rise in December. On a monthly basis, producer prices fell 0.6 percent in January, the third straight month of decrease.


Thursday February 14 2019
China Trade Surplus Beats Expectations in January
General Administration of Customs | Rida Husna | rida@tradingeconomics.com

China's trade surplus widened sharply to USD 39.16 billion in January 2019 from USD 18.42 billion in the same month a year earlier and well above market consensus of USD 33.5 billion.

Exports surged 9.1 percent from a year earlier to USD 217.6 billion in January, defying markets' expectations of a 3.2 percent fall and reversing a 4.4 percent drop a month earlier. The rebound in overseas sales came in amid signs of trade talks progress and efforts from companies to ship out goods ahead of the Lunar New Year holiday. China's unwrought aluminium and aluminium product exports surged 25.5 percent year-on-year to a record 552,000 tonnes in January and were up 6.2 percent from December's revised figure of 520,000 tonnes. In addition, sales of steel products grew 33.1 percent to 6.19 million tonnes and were up 11.5 percent from the prior month's 5.55 million tonnes. Also, coal exports jumped 115 percent to 0.60 million tonnes and surged 94.2 percent from December's 0.31 million tonnes. Sales of rice increased 2.1 percent to 143,000 tonnes, but tumbled 47.0 percent from the previous month's 270,000 tonnes.

Among China's biggest trade partners, exports rose to the EU (15.3 percent), ASEAN countries (12.5 percent), Japan (5.7 percent), South Korea (14.4 percent), Taiwan (13.3 percent) and Australia (19.1 percent). By contrast, exports to the US dropped 2.4 percent.

Imports decreased 1.5 percent to USD 178.4 billion in January, far less than forecasts of a 10 percent slump and after a 7.6 percent decline in December. Purchases of soybean dropped 13 percent year-on-year to 7.38 million tonnes in January, amid higher tariff imposed on shipments from the US. Still, when compared to December's 5.72 million tonnes, soybean imports were up 29 percent. Also, imports of iron ore declined 9 percent to 91.26 million tonnes but were up 5.3 percent from December's 86.64 million tonnes. Inbound shipments of steel products fell 0.9 percent to 1.18 million tonnes but increased 17.9 percent from the prior months's 1 million tonnes. In contrast, imports of unwrought copper climbed 8.9 percent to of 479,000 tonnes and were up 14 percent on the month from December's 420,000 tonnes. In addition, purchases of  copper concentrate went up 17.0 percent to 1.90 million tonnes and advanced 29.8 percent month-on-month. Imports of crude oil grew 4.8 percent from a year earlier to 42.60 million tonnes but were down 2.7 percent from the prior months's 43.78 million tonnes. Also, natural gas imports went up 26.2 percent to 9.81 million tonnes and rose 6.3 percent from 9.23 million tonnes in December. Inbound shipments of coal increased 20.5 percent from a year earlier to 33.50 million tonnes and surged 227.5 percent from December's 10.23 million tonnes.

Imports fell mainly from the US (-41.2 percent), ASEAN countries (-7.1 percent), South Korea (-11.8 percent), Japan (-1.3 percent) and Taiwan (-0.5 percent), but rose from the EU (8.2 percent) and Australia (7.6 percent).

The trade surplus with the US, China's largest export market, narrowed to USD 27.30 billion in January, the lowest since May 2018, from USD 29.87 billion in December.

In yuan-denominated terms, China's trade surplus came in at CNY 271.2 billion in January, with exports rising 13.9 percent and imports advancing at a slower 2.9 percent.

Trade in January and February can be distorted by the Lunar New Year holiday, with business slowing down weeks ahead of time and companies scaling back operations. This year, the holiday fell in the first week of February.