China exports fall but imports show growth
Better-than-expected data may signal firming domestic demand
BEIJING China's exports last month shrank for the fourth consecutive month, underscoring persistent pressures on manufacturers from the Sino-US war, but growth in imports may be a sign that Beijing's stimulus steps are helping to stoke demand.
The 17-month-long trade dispute has heightened the risks of a global recession and fuelled speculation that China's policymakers could unleash more stimulus as growth in the world's second largest economy cooled to nearly 30-year lows.
Overseas shipments fell 1.1 per cent from a year earlier last month, customs data showed yesterday, compared with a 1 per cent expansion tipped by a Reuters poll of analysts and a 0.9 per cent drop in October.
Imports unexpectedly rose 0.3 per cent from a year earlier, marking the first year-on-year growth since April and compared with a 1.8 per cent decline forecast by economists.
The better-than-expected import data may point to firming domestic demand after factory activity showed surprising signs of improvement recently, although analysts have noted that the recovery could be difficult to sustain amid trade risks.
China's trade surplus for last month stood at US$38.73 billion (S$53 billion), compared with an expected US$46.30 billion surplus in the poll and a US$42.81 billion surplus recorded in October.
Beijing and Washington are negotiating a first phase trade deal aimed at de-escalating a trade dispute but they continue to wrangle over key details.
US President Donald Trump said on Thursday that trade talks with China are "moving right along", striking an upbeat tone even as Chinese officials held fast to their line that existing tariffs must come off as part of an interim deal.
One Chinese official said China will implement its own tariffs as a countermeasure if the Dec 15 tariffs go into place, which may dash any chance of a near-term trade deal.
Despite growing strains on the economy, Beijing remains reluctant to implement major stimulus for fear of heightening financial risks given the already high levels of debt.
The authorities have instead opted for more targeted measures such as incremental interest rate reductions and bringing forward 1 trillion yuan (S$193 billion) of the 2020 local government special bonds quota to this year.
People's Bank of China governor Yi Gang reiterated in a signed article published last week that China will not resort to quantitative easing and is committed to maintaining a prudent monetary policy. - REUTERS