Stabilising Trade Terms, But Headwinds Ahead For Imports

Economic Research	08 June 2017
China
Economic Update
Stabilising Trade Terms, But Headwinds Ahead For Imports China’s trade growth improved in May, amid better-than-expected economic recovery globally. In our view, China’s export growth would stabilise at mid to high single-digit levels in the coming months given stable economic conditions. But the import growth rate could be affected by easing commodity prices and the high base effect. As such, trade surplus would continuously expand and may partially offset the impact from capital outflows. In the meantime, we believe the CNY would remain strong against the USD in 2017. We revise our year-end forecast to 6.95CNY/USD from 7.15CNY/USD previously, indicating no depreciation against the US currency in this year. Economist:  Zhang Fan| +8621 6288 9611 ext 105