China Stock Research

About the Author China Stock Research

Several years experience as an analyst in the hedge fund world. Investment knowledge includes long/short equities, credit, macro, arbitrage, distressed debt, and special situations. Previous research publication experience includes Japanese small cap research distributed to institutional investors. Education credentials include BS in Computer Science, MBA in Finance, and CFA Charter. Follow on Twitter @ChinaStockRsrch Follow on StockTwits @ChinaStockResearch

Eco Data – Exports And Imports For January 2015

The Chinese Customs Bureau released trade data for January which showed both imports and exports falling YoY faster than expected, and a strong USD meant that the country reported a staggering 60 billion USD trade surplus. Imports were down -19.9% YoY, well under expectations for a -3% drop, and exports fell by -3.3%, nowhere close to the +6.3% consensus estimate.

January’s trade data showed continued weakness in Europe, extending the theme from recent months, the difference being in January there was an outright contraction YoY instead of just a weakening trend. The weakening Euro has arguably been a factor for the data, however waning demand in Europe is probably also a culprit.

The RMB has strengthened nearly 17% since June 2014 (form 8.50 EUR/CNY to 7.06 last week, data from, which has undoubtedly impacted the competitiveness of Chinese goods for European consumers.

Major Trading partnersJul-14Aug-14Sep-14Oct-14Nov-14Dec-14Jan-15
YoY Trade growth
Hong Kong

Although it may be convenient to blame the Chinese New Year for impacting trade flows, it doesn’t seem to make much sense. In 2014, the Lunar New Year kicked off in mid-January, vs. mid-February this year, so if anything, the YoY comparison for January should be skewed to the upside if economic activity was dampened last year.

At any rate, seeing imports plummet to levels not seen in over a year seems noteworthy considering the government’s goal to boost consumption. Clearly the trade data is a downside surprise, but the PBOC just cut the RRR last week (under the auspices of ensuring liquidity during the Chinese New Year holiday), so it may be too soon to expect more stimulus. That notwithstanding, this month’s data shows that a major sector of China’s economy, exports, is facing some headwinds, which may up the pressure on policymakers.

China Trade Data (YoY)Jan-14Feb-14Mar-14Apr-14May-14Jun-14Jul-14Aug-14Sep-14Oct-14Nov-14Dec-14Jan-15
Source: China Customs Statistics
Trade balance (billion USD)31.9-23.07.718.525.931.647.349.830.945.454.549.160.0