China Exports Fall for Fifth Month, Import Slump Continues – Bloomberg

China's exports fell for a fifth month and a slump in imports extended to a record 13 months as trade slows along with the world's second-largest economy.

Overseas shipments dropped 6.8 percent in November in dollar terms from a year earlier, the customs administration said Tuesday. That compared to the median forecast of a 5 percent decline in a survey of economists and the 6.9 percent fall in October. Imports declined 8.7 percent in dollar terms, leaving a trade surplus of $ 54.1 billion.

With sluggish trade combining with slowing residential construction, policy makers may need to keep their foot on the gas even after six interest rate cuts and expedited fiscal spending. The import slowdown is also a drag on other nations as robust consumer demand hasn't picked up fast enough to offset declines in rust belt industries.

“Global demand is staying around the bottom, just like China's domestic economy,” said Hu Yuexiao, an economist at Shanghai Securities Co. “We will still see tepid trade next year with a big trade surplus.”

The Shanghai Composite Index was 1.3 percent lower as of 11:48 a.m. local time and the yuan weakened.

The trade data comes after a report last week showed China's manufacturing conditions slipped to the weakest level in more than three years. Inflation data Wednesday is forecast to show consumer prices grew about half as quickly as the central bank targets and producer price deflation deepened in November.

“The economy is generally weak,” said Zhu Qibing, a Beijing-based analyst at China Minzu Securities Co. “Except for consumption, we are unlikely to see any pickup in other data releases this month. “

Exports to the U.S., one of the world's few economic bright spots, dropped 5.3 percent from a year earlier, while shipments to the European Union decreased 9 percent.

Imports Decline

The decline in imports narrowed from an 18.8 percent fall in October and compared to a median forecast for an 11.9 percent drop. Imports from Brazil jumped 34.9 percent, reversing a stretch of declines this year.

“There are signs that recent policy easing may have resulted in an improvement in current conditions,” Julian Evans-Pritchard, China economist at Capital Economics Ltd., wrote in a report.

China increased its volume of imported iron ore, crude oil and agricultural products while reducing those of coal and steel in the first eleven months from a year earlier, the customs administration said on its website.

“Fading exports remain a main drag on the slowing economy, adding downward pressure on the yuan and increasing the likelihood of further easing,” Bloomberg economists Fielding Chen and Tom Orlik wrote in a note. “The hope is that the recovery in the global economy in 2016 may extend some help to China's exports.”