View related analysis:
Chinese imports and exports contract
Imports contracted slightly YoY by -0.4% but this was better than the consensus of -6%, with Chinese trade surplus now sitting at a 4-month high having expanded for 3 consecutive months.
However, market sentiment was boosted as exports declined at -4.1%, outweighing the negative effects of contracting imports. So whilst on a YoY basis both domestic and international demand for Chinese goods is down, it is a net positive for exporter countries (and key trade partners) such as Australia and New Zealand as this helps their growth figures and export numbers.
Not only is the YoY% import read close to crossing above 0 (to denote international exports are on the rise) but it may have seen the low at -20.5% in March 2015. We will continue to monitor this component of trade balance with great interest over the coming months to assess international demand. These are early days but if imports continue to improve over coming months then this will be net positive for trade partners but negative for Chinese GDP.