China: Better than expected October trade data – TDS

Analysts at TD Securities note that the China’s October trade data came out better than expected with exports -0.9% y/y (mkt -3.9%) and imports -6.4% y/y (mkt -7.8% y/y).

Key Quotes

“China's trade surplus was bigger than expected at $42.81bn (mkt $40.1bn). China's trade surplus with the US increased to $26.4bn but narrowed on a 12m basis to its smallest since Oct 18 at $313bn. Imports from the US, dropped by 16.2% y/y.”

“We do not expect any improvement in exports in the months ahead, while imports are also likely to remain soft. The trade surplus with the US is likely to continue to move in the right direction, however.”

“While China's rolling 12m trade surplus with the US decreased the surplus with Europe and Asia grew, to $152.8bn and $96.7bn, respectively. China's imports from several countries in Asia are negative y/y, especially Korea.”

“Conversely exports are positive to most countries, except India where there has been growing sensitivity to the burgeoning bilateral trade deficit. China's trade deficits with Korea and Taiwan continue to narrow as imports continue to shrink, due to increasing self-reliance in some areas of technology production.”