Little Improvement in Overall Demand

Economic Research	08 November 2016
China
Economic Highlights
Little Improvement in Overall Demand China’s export and import growth both missed market expectation again in Oct 2016, showing the pace of demand recovery was not as good as market previously thought. In the near term, we believe improvement in advanced economies and low base effect may somehow drive China’s export growth to gradually move towards par level, while rising commodity prices and speed-up of infrastructure investment and PPP projects may keep import growth at current levels. But as uncertainty remains for global economic recovery, we believe trade growth is likely to stay low. On the currency side, it is likely the latest round of CNY depreciation is nearing an end and will likely fluctuate around current levels in the next couple of weeks. But in a longer term, we still believe CNY may move towards 7.0-7.1CNY/USD in end-2017, given more rate hikes in the US and muted recovery in China. Economist:  Zhang Fan| +8621 6288 9611 ext 105
To access our recent reports please click on the links below: 02 Nov: Preview: A Stabilising Economy, But Long-Term Pain Persists 01 Nov: Stabilised Industrial Sectors Signal More Focus on Reforms 19 Oct: Little Surprise, While Underlying Problems Remain 14 Oct: First PPI Expansion in 55 Months 13 Oct: Lower-Than-Expected Trade Numbers Reflect Weak Demand Recovery 10 Oct: Near-term Stabilisation, But Concerns Remain 04 Oct: Manufacturing Sector Stabilised In The Near Term 13 Sep: Stabilising Economic Conditions Amid Supports From Government