China exports snap losing streak on weaker yuan

POSITIVE SIGN FOR GLOBAL ECONOMY: Plunging yuan made Chinese goods cheaper for overseas buyers.

Beijing: Chinese exports beat expectations in November, a positive sign for the global economy, but analysts warned on Thursday of an uncertain outlook as US President-elect Donald Trump prepares to take office, with Beijing’s trade policy in his sights.
The advance broke a seven-month losing streak and marks a sharp turnaround from the previous month helped by a plunging yuan, which made the country’s goods cheaper for overseas buyers.
Imports also beat forecasts, suggesting the world’s number two economy continues to stabilise after years of slowing growth and providing some welcome news for the country’s leaders.
Exports increased 0.1 per cent year-on-year to $196.8 billion, beating a Bloomberg News survey of economists predicting a median five per cent drop.
Rising commodity prices also lifted imports 6.7 per cent to $152.2 billion, compared with expectations of a 1.9 per cent fall. The trade surplus slipped to $44.6 billion in the month.
China is the world’s biggest trader in goods, and its performance affects partners from Australia to Zambia, which have been battered as its expansion has slowed to levels not seen in a quarter of a century.
However, it has suffered years of slowing growth and last year expanded at its weakest rate in a quarter of a century.
The readings were a massive improvement on the previous month, when exports dived 7.3 per cent and imports fell 1.4 per cent.
Stable overseas demand and a weaker Chinese currency helped, with the yuan sliding against the dollar to eight-year lows in recent weeks.
But analysts with ANZ warned that the “upside surprise” in exports reflected a delay in shipments from the previous two months.
A broadly sluggish outlook for global growth will weigh on exports, he said, while the cooling of China’s red-hot property market will suppress demand for imported commodities.
China also faces possible road bumps as Trump — who has blasted Beijing as a protectionist and has threatened to tear up global trade deals — takes office on January 20.
The billionaire-businessman-turned-politician has promised to declare China a currency manipulator and threatened to slap 45 per cent punitive tariffs on imports from the country to protect jobs.
As a warm up, he fired off two tweets on Sunday blasting the country’s policies. “Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into their country (the US doesn’t tax them),” he demanded. “I don’t think so!”
China, which tightly controls the yuan’s movement, has in recent months steadily weakened the rate around which the currency is allowed to trade.
Last month it put it beyond 6.9 to the dollar for the first time in more than eight years. — AFP