Strong Trade Growth Reflects Stable Demand Recovery

Economic Research	13 April 2017
China
Economic Update
Strong Trade Growth Reflects Stable Demand Recovery China’s trade terms improved significantly in March. Export was encouraged by stable recovery in both developed and emerging countries. Imports were also lifted by solid domestic demand. Looking ahead, we believe exports may still gradually improve in the coming months due to the low base effect and stabilising global demand. However, the pace of increase in import growth is likely to slow down as a result of the falling PPI and rising comparable base in 2H17. On the currency side, the CNY may only mildly depreciate against the USD given pressure from the US. However, the currency would devaluate further against a basket of currencies as gains in REER terms. Economist:  Zhang Fan| +8621 6288 9611 ext 105