China’s worse-than-expected trade data don’t tell whole story
15 January, 2019
Too much is being made of the December China imports number. Imports were running at very high levels historically, probably as Chinese companies stocked up in anticipation of tariffs, and have fallen off again.
The 20-30% YOY gains during most of 2018 weren’t interpreted as signs of extremely fast Chinese growth. Nor should the December print be interpreted as a sign of a sudden slowdown.
It helps to look at the level of China imports by country (indexed to Jan. 2015 = 100).
There was an extraordinary surge in the fall of 2018 followed by a retracement. The US, on the other hand, really slumped. Note that Europe isn’t doing too badly.
I don’t know how good Chinese inventory data are (I doubt they are any better than ours) but there was a surge in inventories during late 2018.
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