Chinese imports have now declined for 23 of the last 24 months (falling 1.4% YoY in USD terms) and for 18 of the last 20 months, despite a devaluing yuan, exports have declined YoY (-7.3% YoY in October). In both USD and Yuan terms, trade data disappointed across the board suggesting a global economy that is far from as exuberant as recent PMIs suggest.
As Bloomberg notes, a depreciation of about 9 percent in the yuan since August 2015 has cushioned the blow from tepid global demand, but failed to provide any sustained boost to shipments. Rising input costs and surging wages bills have flattened profit margins for exporters to the point where many can no longer discount and are mulling price increases, according to interviews at the Canton Fair last month.
“We expect export growth to remain sluggish over the coming quarters due to a weak global economic environment and rising costs for Chinese goods,” BMI Research wrote in a report ahead of the data release. “The slow growth in the global economy will continue to be the major factor weighing on China’s export sector over the coming quarters.”
via http://ift.tt/2fNAfE7 Tyler Durden