China’s trade balance points to inflation
Print This Story
« Marc Faber 2010 Outlook: Go For Gold, Oil & Agriculture, But Watch Out For PIIGS & U.S. Equities | Chinese Stealth Treasury Purchasing Continues »
January 21st, 2010 by Rebecca Wilder
Tweet This | Email This Article
Tweet This | Email This Article
The Customs Administration announced record trade flows in and out of China in December. Specifically, exports grew at a 17.7% annual pace, while imports surged 55.9% over the year. This is a remarkable one-month rebound; reported export growth beat consensus expectations by a factor of 3.5 (+ 5% export growth and + 32.5% import growth, according to Bloomberg).
China is experiencing robust domestic demand growth, as illustrated by the surge in imports. Furthermore, there is likely significant price pressure built into this report since the data are measured in nominal $USD. The December trade report suggests that inflation pressures are underway in China’s economy; expect a big jump in coming inflation reports.
I wouldn’t be surprised if the government allows the yuan to appreciate sooner, rather than later, in light of this report.
Rebecca Wilder
Rebecca Wilder is an economist in the financial industry. She was previously an assistant professor and holds a doctorate in economics. Read more from the author/contributor here.
Tags: Bloomberg, China, China Economy, China S Economy, China Trade, Consensus Expectations, Customs Administration, Emerging Markets, Import Growth, Inflation Pressures, Inflation Reports, Pace, Rebecca, Rebound, Report Suggests That, Trade Balance, Yuan
Posted in Canadian Stocks, China, Markets | No Comments »
Twitter
RSS