Chinese trade data, continuing the theme seen in recent years, has yet again underwhelmed expectations in September.
After a reasonable performance in August, it’s proven to be a major disappointment for financial markets.
According to China’s Customs Bureau, the value of exports dropped 10% in the year to September in US dollar terms, falling short of forecasts for a decline of 3.0%.
It was also a significant deterioration on the 2.8% decline registered in August, and the steepest annual decline since January.
Reflecting not only weaker commodity prices but also tepid external demand, the value of exports between January to September fell 7.5% compared to the same period in 2015.
In the year to September, the Chinese yuan weakened by 5.5% against the US dollar, providing some perspective on the weakness in the export figures.
The weak figure has, in part, been amplified by weakness in the Chinese currency.
Following the release of the data, a spokesman from the Customs Bureau said that the impact of currency movements were limited.
The Bureau also said that China was facing “intensified” trade protectionism.
Imports, after rising in year-on-year terms for the first time since October 2014 in August, also slipped back into contractionary territory, falling 1.9% from a year earlier.
That too missed forecasts for a gain of 3.0%, and was a reversal from the 1.5% lift recorded previously.
So far this year, the value of imports is down 8.2% compared to the same period in 2015.
Underlining that much of that weakness in this figure was due to falling commodity prices, imports of crude oil, iron ore and copper in volume terms rose by 14%, 9.1% and 11.8% between January to September compared to the same period in 2015.
Largely as a result of the weak export figure reported, the trade surplus narrowed to $US41.99 billion, the smallest seen since March.
The disappointing trade report kicks off what will be a busy period for Chinese economic data.
On Friday consumer and producer price inflation figures for September will be released.
That will be followed next week by retail sales, industrial output and urban fixed asset investment figures for September, along with the all-important Q3 GDP release, on Wednesday.
Monetary figures from the People’s Bank of China, usually released alongside the GDP report, are also scheduled to hit.
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