KUALA LUMPUR: The February trade data confirms China’s disappointing start to 2016, with exports declining 17.9 per cent for the January-February period, the lowest since 2012, due to weak external demand.
According to HSBC Global Research, shipments to both developed and developing markets weakened, with exports to ASEAN countries seeing the biggest contraction of 32.2 per cent from the same period last year. However, Chinese exporters’ share of major markets, including the European Union (EU) and the United States (US) did not shrink as exports from other competing nations fell even faster.
It confirmed sluggish global demand as the main reason for the country’s disappointing exports rather than a general loss of competitiveness.
Meanwhile, imports remained in deep contraction at -16.6 per cent in January-February, HSBC Global Research said in its research note.
It explained that the recent stabilisation in commodity prices prevented imports from slipping further, but weak domestic demand would remain a drag on the import numbers.
Overall, amid the continuous weakening recovery pace of the global economy, HSBC Global Research said China’s export growth would face a difficult 2016.
“Recent currency moves are unlikely to have a large impact on overall net exports, and we believe that growth will be mainly domestically-driven in 2016,” it added.
“In light of the downward pressure on overall economic activity, we believe that a more decisive policy stimulus package, including more aggressive monetary policy and fiscal expansion, is warranted to boost aggregate demand and fight deflation,” it added.