More worrying news from China in the details of the country’s November trade report.
We had further confirmation that the Chinese economy continues to slow, so look for weak inflation figures tomorrow, and sluggish data on production, investment and retail sales on Friday.
Exports and imports were both weaker than expected and the trade surplus ballooned to an all time high of $US54.47 billion, the second all time high registered this year.
China’s exports rose 4.7% in November from the same month in 2013, down from an 11.6% rise in October.
Imports fell 6.7% from a year earlier, after a surprise turnaround of 4.6% rise in October.
It is the third time in the past few months that Chinese imports have fallen in a month.
China’s exports and imports in November totalled $US368.85, down 0.5% year on year.
But Chinese investors ignored the weak trade figures and again pushed the market higher – it hit a three and a half year high of 3,020 points.
It is now up more than 42% since July after yesterday’s 2.80% jump amid bubble-like buying.
In the first eleven months of the year, China’s imports and exports reached $US3.9 trillion dollars, up 3.4%.
But don’t tell Chinese sharemarket investors – the country’s current stockmarket boom continued yesterday despite the weak news.
Reflecting the weak import performance especially, the country’s trade surplus in the first 11 months of 2014 jumped more than 42% to a huge $US332.5 billion.
Worryingly for Australia, China’s imports of iron ore in November fell 15% from a year earlier to 67.4 million tonnes. Imports were down 15.1% on October, it said.
In the 11 months ended Nov. 30, China imported 845.77 million tons of iron ore, up 13.4% from a year earlier, according to the data.
In October iron ore shipments fell 6.3% to 79.39 million tonnes from September.
October’s imports were a very solid 16.7 million tonnes up on the 67.8 million tonnes imported in the same month of 2013, the fall in November from the same month last year significant.
China imports continue to cool
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China’s exports to the US 2.6% in November from a year earlier, down from October’s 10.9% jump; while shipments to the European Union rose 4.1% percent, the same as October.
Julian Evans-Pritchard at Capital Economics said the trade data “hints at a further cooling of domestic demand."
“What’s more, the fall in import growth would have been larger had it not been for a weaker base for comparison – imports fell 1.8% m/m in seasonally adjusted terms in November 2013," he wrote, according to the Financial Times.
Some analysts reckon Chinese domestic investors are buying shares because they expect the country’s central bank will support the economy via more stimulus, such as interest rate cuts in addition to the surprise cut last month.
Crude oil imports rose to 25.41 million tonnes in November, equivalent to about 6.18 million barrels per day (bpd), up from 5.67 million bpd in October.
Those imports were worth $US16.42 billion worth in November, down from $US18.43 billion a year earlier, so a saving of $US2 billion as China continues to import oil to stock its strategic stockpiles, as well as meeting the demands of industry and consumers.
Copper imports in November rose 5% from October to a seven-month high of 420,000 tonnes.
Analysts reckon this reflected stockpiling by companies and the government, as well as the narrowing of price differentials between China and the rest of the world, which helps the Chinese justify stepping up purchases.
While some of the fall in imports in November can be attributed to falling commodity prices, it also points to softer domestic demand.
Only those commodities being stockpiled for strategic reasons are showing import growth (oil, copper for example), with the others (especially iron ore) confirming the idea of a Chinese economy losing steam.
