While the growth in the demand for imports were found to be much less and slowing down compared to what economists had expected, the November data for China’s foreign trade also shows that the exports growth made by the second largest economy in the world was also at a two-year high. This data for the month of November, which was quite strong, has surprised many of the economists who had predicted otherwise.
From a 6.1 percent growth rate year-on-year for the month of October to 10.3 percent rate for the month of November, there was a sharp growth in the exports rate according to the country’s Customs and Administration. The growth rates were calculated in local currency terms. Compared to this, the consensus export growth rate by economists for the month of November was 2.0 percent.
Noting a growth rate of 15.6 percent year-on-year, the import growth also outpaced forecasts by economists. The import growth rate in October read 15.9 percent – slightly more than eh November number. Economists had predicted the November growth rate to be 12.5 percent.
In recent months, the global economic scenario had been concerned about the condition of the underlying situation of the second largest economy of the world and experts said that the growth in the rate of import was specifically important as it could be reflective of some form of strong underlying economic conditions in the Asian giant.
However, the Chinese economy might not be as robust as is being depicted or may be inferred from the export and import data, Julian Evans-Pritchard at Capital Economics sounding a caution.
He said that the down turn in the local property market in China has resulted in weakening of investment growth nationally, and therefore he believes that the local economy still presented a picture that appears to be on course to get weakened.
Because of the expectation that headline rates of growth in trade would be weighed down by “unflattering” base-effects, therefore Evans-Pritchard also indicated that he was somewhat puzzled by the strong export trade data.
Following a drop of 1.5 percent in October, the strongest pace in the growth of export volumes in two years was noted in the month of November with a growth rate of 6/9 percent, as calculated by Capital Economics in seasonally adjusted terms.
Meanwhile, after a 0.3 percent drop in October, imports were 5.2 percent higher in the same period.
Significantly, there was a growth rate increase in November from 0.9 percent year-on-year to 6.1 percent in the import volumes of major industrial commodities.
However, because of the fact that a number of mines and factories have been forced to shut down or reduce production due to Beijing’s anti-pollution drive, one fails to understand exactly relate the increase in demand for commodities to the extent that a supposed bounce back in demand has happened and related to the recent disruptions in domestic supplies for the very same commodities, according to Evans-Pritchard.
(Adapted from Digitallook.com)