Hellraiser007
FULL MEMBER
- Joined
- Aug 2, 2012
- Messages
- 1,971
- Reaction score
- -3
More slowdown fears as China's trade slumps
A surprise fall in China's imports and exports has signalled a further slowdown in the world's second-largest economy, spelling possible short-term risks for Australia.
Exports for Australia's largest trading partner fell 3.1 per cent in June from a year earlier, while imports declined 0.7 per cent as China warned of a "grim" outlook. The figures were far from analysts' expectations of a rise in exports and imports.
China's trade surplus widened to $US27.1 billion ($29.5 billion) from $US20.4 billion in May, while iron ore imports slowed to 6.8 per cent growth year-on-year.
"It was a big disappointment," JPMorgan chief economist Stephen Walters said.
Advertisement
"We're not talking about abrupt slowdowns, but clearly the numbers today were pretty soft."
The Australian dollar fell about US0.70¢ to US91.26¢ after data was released. It rebounded and was buying US92.10¢ late on Wednesday.
The weaker data, which followed a central government crackdown on over-invoicing, came as a private survey found Australian consumer sentiment remained steady in July.
It also came ahead of Thursday's much-anticipated jobless figures for June. The unemployment rate in Australia is forecast to rise by 0.1 per cent to 5.6 per cent last month amid a slower-than-expected transition away from mining-led growth.
Economists said the decline of exports and imports, the first time since October 2009 and excluding distorted figures during Chinese New Year, underscored the weakness of external and domestic demand conditions.
"The current downside pressures to growth seem to be even larger than the midyear slowdown in 2012," HSBC economists Sun Junwei and Qu Hongbin said.
"This also adds pressure ... on Beijing to fine-tune policy to prevent a hard landing."
Mr Walters said weakness in China's export numbers suggested production was slowing in areas such as steel and cement, which could in turn lead to a weaker patch for Australian exports to China.
But he warned against being "too downbeat", as improving conditions in some of China's biggest export markets, such as Japan, Europe and the US, meant there would be sufficient demand for Chinese products in those countries down the track.
Commonwealth Bank currency strategist Peter Dragicevich said despite the weak headline numbers,imports from Australia were still rising. "If you look at the imports from Australia, we're up almost 12 per cent year-on-year. Iron ore was a little bit lower than the last few months but still up in terms of volumes compared to a year ago,"
he said.
"So that's really the key factor for Australia, that the volume story in terms of our exports – particularly to China – continue to grow."
The International Monetary Fund downgraded its growth forecast for China by 0.3 percent to 7.8 per cent for 2013 on Wednesday. It lowered its outlook for 2014 by 0.6per cent to 7.7 per cent.
Hong Kong-based brokerage CLSA also lowered its 2013 growth forecast for China to 7 per cent, noting that first-quarter growth was disappointing.
The slowdown in China's economy has weighed on growth forecasts for Australia. An expected peak in mining investment, together with a raft of soft economic data over the past few months has seen the Reserve Bank maintain an easing bias.
UBS economist George Tharenou said the Westpac-Melbourne Institute survey on consumer sentiment showed that confidence was showing only a little improvement, despite the RBA's 200 basis points of rate cuts since November. "So overall, we think the RBA will cut a further 25 basis points in August."
Financial markets were pricing in a 61 per cent chance of a cut to the cash rate in August, Credit Suisse data showed.
Read more: More slowdown fears as China's trade slumps
##############################################################################################################################
Weak China trade data adds to growth fears
http://www.google.com/hostednews/af...docId=CNG.5a572bc3bae7b49666a29960701a7f29.f1
BEIJING — China's trade surplus fell 14.0 percent in June as imports and exports both dropped unexpectedly, data showed Wednesday, suggesting a further slowdown in the Asian economic giant as Beijing warned of "grave challenges".
The figures are the latest to set alarm bells ringing over the health of China's rebound from a prolonged downtrend as trade and manufacturing conditions have worsened this year.
Exports slipped 3.1 percent to $174.32 billion, according to figures from Customs, while imports were down 0.7 percent at $147.19 billion, leaving a trade surplus of $27.13 billion.
Average expectations in a survey of 20 economists by Dow Jones Newswires had been for a 3.3 percent rise in exports and imports to go up 5.5 percent.
"Currently China's foreign trade is facing grave challenges," Customs spokesman Zheng Yuesheng told reporters.
He said "prolonged sluggish foreign demand" was the main cause, followed by rising export prices in foreign currency terms, labour costs, and a deteriorating trade environment due to growing trade disputes.
The figures came after the International Monetary Fund on Tuesday cut its global economic growth forecast, citing new downside risks in key emerging-market economies and a deeper recession in the eurozone.
The IMF projected the world economy to expand 3.1 percent in 2013, down from its April estimate of 3.3 percent.
China and other emerging economic powers now face new risks, it warned, "including the possibility of a longer growth slowdown".
Economists from ANZ bank warned China would not achieve its goal of eight percent growth in trade this year -- after failing to deliver a 10-percent gain targeted for 2012 -- if the softness persists.
"This will not only bring about downside risk to the GDP growth for this year but also place severe pressure on employment," Liu Ligang and Zhou Hao said in a research note.
China's economy grew 7.8 percent in 2012, its worst performance in 13 years, on the back of slack demand for exports and weakness at home.
The first three months of this year saw expansion of just 7.7 percent, disappointing analysts who had expected growth to accelerate after showing strength at the end of 2012.
The government has set a growth target for 2013 of 7.5 percent, the same as last year's, as it looks to retool its economic model from exports to domestic consumption.
Beijing is due to announce gross domestic product figures for the second quarter on Monday.
Zheng said the factors bedevilling China's trade situation are likely to linger over the short term.
"Trade still faces a complicated and volatile situation in the second half of the year and there are a lot of difficulties and challenges," he said.
Chinese shares closed strongly despite the data, with the benchmark Shanghai Composite Index rising 2.17 percent, or 42.68 points, to 2,008.13.
"Investors have pretty much taken into account... that China's economy is going to slow further," Minsheng Securities analyst Zhang Lei told Dow Jones Newswires.
China's trade surplus for the first six months of 2013 was substantially bigger than the same period last year, the statistics showed, up 58.5 percent to $107.95 billion.
First half exports rose 10.4 percent to $1.05 trillion and imports increased 6.7 percent to $944.87 billion.
But Zheng indicated the figures were inflated to a certain degree by some importers and exporters overstating their business to evade government capital controls and channel funds into the country to profit from higher interest rates.
A surprise fall in China's imports and exports has signalled a further slowdown in the world's second-largest economy, spelling possible short-term risks for Australia.
Exports for Australia's largest trading partner fell 3.1 per cent in June from a year earlier, while imports declined 0.7 per cent as China warned of a "grim" outlook. The figures were far from analysts' expectations of a rise in exports and imports.
China's trade surplus widened to $US27.1 billion ($29.5 billion) from $US20.4 billion in May, while iron ore imports slowed to 6.8 per cent growth year-on-year.
"It was a big disappointment," JPMorgan chief economist Stephen Walters said.
Advertisement
"We're not talking about abrupt slowdowns, but clearly the numbers today were pretty soft."
The Australian dollar fell about US0.70¢ to US91.26¢ after data was released. It rebounded and was buying US92.10¢ late on Wednesday.
The weaker data, which followed a central government crackdown on over-invoicing, came as a private survey found Australian consumer sentiment remained steady in July.
It also came ahead of Thursday's much-anticipated jobless figures for June. The unemployment rate in Australia is forecast to rise by 0.1 per cent to 5.6 per cent last month amid a slower-than-expected transition away from mining-led growth.
Economists said the decline of exports and imports, the first time since October 2009 and excluding distorted figures during Chinese New Year, underscored the weakness of external and domestic demand conditions.
"The current downside pressures to growth seem to be even larger than the midyear slowdown in 2012," HSBC economists Sun Junwei and Qu Hongbin said.
"This also adds pressure ... on Beijing to fine-tune policy to prevent a hard landing."
Mr Walters said weakness in China's export numbers suggested production was slowing in areas such as steel and cement, which could in turn lead to a weaker patch for Australian exports to China.
But he warned against being "too downbeat", as improving conditions in some of China's biggest export markets, such as Japan, Europe and the US, meant there would be sufficient demand for Chinese products in those countries down the track.
Commonwealth Bank currency strategist Peter Dragicevich said despite the weak headline numbers,imports from Australia were still rising. "If you look at the imports from Australia, we're up almost 12 per cent year-on-year. Iron ore was a little bit lower than the last few months but still up in terms of volumes compared to a year ago,"
he said.
"So that's really the key factor for Australia, that the volume story in terms of our exports – particularly to China – continue to grow."
The International Monetary Fund downgraded its growth forecast for China by 0.3 percent to 7.8 per cent for 2013 on Wednesday. It lowered its outlook for 2014 by 0.6per cent to 7.7 per cent.
Hong Kong-based brokerage CLSA also lowered its 2013 growth forecast for China to 7 per cent, noting that first-quarter growth was disappointing.
The slowdown in China's economy has weighed on growth forecasts for Australia. An expected peak in mining investment, together with a raft of soft economic data over the past few months has seen the Reserve Bank maintain an easing bias.
UBS economist George Tharenou said the Westpac-Melbourne Institute survey on consumer sentiment showed that confidence was showing only a little improvement, despite the RBA's 200 basis points of rate cuts since November. "So overall, we think the RBA will cut a further 25 basis points in August."
Financial markets were pricing in a 61 per cent chance of a cut to the cash rate in August, Credit Suisse data showed.
Read more: More slowdown fears as China's trade slumps
##############################################################################################################################
Weak China trade data adds to growth fears
http://www.google.com/hostednews/af...docId=CNG.5a572bc3bae7b49666a29960701a7f29.f1
BEIJING — China's trade surplus fell 14.0 percent in June as imports and exports both dropped unexpectedly, data showed Wednesday, suggesting a further slowdown in the Asian economic giant as Beijing warned of "grave challenges".
The figures are the latest to set alarm bells ringing over the health of China's rebound from a prolonged downtrend as trade and manufacturing conditions have worsened this year.
Exports slipped 3.1 percent to $174.32 billion, according to figures from Customs, while imports were down 0.7 percent at $147.19 billion, leaving a trade surplus of $27.13 billion.
Average expectations in a survey of 20 economists by Dow Jones Newswires had been for a 3.3 percent rise in exports and imports to go up 5.5 percent.
"Currently China's foreign trade is facing grave challenges," Customs spokesman Zheng Yuesheng told reporters.
He said "prolonged sluggish foreign demand" was the main cause, followed by rising export prices in foreign currency terms, labour costs, and a deteriorating trade environment due to growing trade disputes.
The figures came after the International Monetary Fund on Tuesday cut its global economic growth forecast, citing new downside risks in key emerging-market economies and a deeper recession in the eurozone.
The IMF projected the world economy to expand 3.1 percent in 2013, down from its April estimate of 3.3 percent.
China and other emerging economic powers now face new risks, it warned, "including the possibility of a longer growth slowdown".
Economists from ANZ bank warned China would not achieve its goal of eight percent growth in trade this year -- after failing to deliver a 10-percent gain targeted for 2012 -- if the softness persists.
"This will not only bring about downside risk to the GDP growth for this year but also place severe pressure on employment," Liu Ligang and Zhou Hao said in a research note.
China's economy grew 7.8 percent in 2012, its worst performance in 13 years, on the back of slack demand for exports and weakness at home.
The first three months of this year saw expansion of just 7.7 percent, disappointing analysts who had expected growth to accelerate after showing strength at the end of 2012.
The government has set a growth target for 2013 of 7.5 percent, the same as last year's, as it looks to retool its economic model from exports to domestic consumption.
Beijing is due to announce gross domestic product figures for the second quarter on Monday.
Zheng said the factors bedevilling China's trade situation are likely to linger over the short term.
"Trade still faces a complicated and volatile situation in the second half of the year and there are a lot of difficulties and challenges," he said.
Chinese shares closed strongly despite the data, with the benchmark Shanghai Composite Index rising 2.17 percent, or 42.68 points, to 2,008.13.
"Investors have pretty much taken into account... that China's economy is going to slow further," Minsheng Securities analyst Zhang Lei told Dow Jones Newswires.
China's trade surplus for the first six months of 2013 was substantially bigger than the same period last year, the statistics showed, up 58.5 percent to $107.95 billion.
First half exports rose 10.4 percent to $1.05 trillion and imports increased 6.7 percent to $944.87 billion.
But Zheng indicated the figures were inflated to a certain degree by some importers and exporters overstating their business to evade government capital controls and channel funds into the country to profit from higher interest rates.
