Headwinds Returning With Slower Trade Growth Ahead

Economic Research	09 May 2017
China
Economic Update
Headwinds Returning With Slower Trade Growth Ahead China’s trade growth eased in Apr 2017, amid softening commodity prices. Looking ahead, we expect export growth to stabilise at a mid- to highsingle digit in the next couple of months given the solid expansion of manufacturing sectors in developed countries. But a long-term overhang would still come from US policies to narrow its trade deficit. For import growth, it could also normalise towards a mid-single digit level as a result of falling raw material prices and high base effect in the coming quarters. On the currency side, we see little pressure from USD, but CNY could depreciate more against a basket of currencies due to gains in REER terms. Economist:  Zhang Fan| +8621 6288 9611 ext 105
To access our recent reports please click on the links below: 02 May: Signs Of Moderation 17 Apr: Strong Start, But Headwinds Loom 13 Apr: Strong Trade Growth Reflects Stable Demand Recovery 12 Apr: More Downside Pressure Ahead For PPI Growth 10 Apr: No Concrete Gains, But Eye On The Future 03 Apr: Stable Industrial Growth