First Insights: China: Trade slows but the growth recovery remains on track

First Insights: China: Trade slows but the growth recovery remains on track Export growth slowed to 2.9% y-o-y in November from 11.6% in October (Consensus 9%, Nomura 7%), while import growth slowed to 0% from 2.4% (Consensus 2.0%, Nomura 0%). Our comments: 1. The export growth slowdown was mostly driven by weaker demand in developed economies. Trade with the US, Europe and Japan all slowed. Trade with Asean held up well. 2. The import growth slowdown was also driven mostly by external demand, as import growth for parts and components for processing and re-export purposes dropped to 5.5% from 7.3%. 3. Domestic demand did not change much as import growth for domestic consumption was stable (-6.3% in November from -6.4% in October). It did not pick up much as the economy has been going through a destocking phase; hence, the recovery has not yet fully affected imports. 4. We believe economic recovery will continue in coming months, driven mostly by domestic activities, while policy will likely remain loose. Economists Zhiwei Zhang