China’s total exports dropped 1.1% year over year in November, the country’s customs administration said on Sunday. Total exports to the United States fell 23% year over year. That was the worst result for exports to the United States since February and a 12th straight monthly drop.
Economists and analysts had expected total exports to rise by 0.8% because as a result of companies stocking up on inventory ahead of the holiday shopping season.
Imports to China from the United States, in contrast, rose for the first time since August 2018 with growth of 2.7% year over year. Some of that might be a result of increased goodwill purchases of U.S. farm products. For example, the value of soybean imports from all countries was up 41% from a year ago. (The customs administration did not break out a country-by-country source of those increased soy bean imports.)
It will be interesting to see how global financial markets react to the news on Monday.
On the one hand, a continued drop in Chinese exports is not good news for growth in China’s economy–although the news on imports suggests that China’s economy is stabilizing. A further slowdown in economic growth in China would tip global growth lower and global growth is already worryingly low.
On the other hand, the bad news on China’s exports may be seen by markets as increasing the odds of a Part 1 trade deal between the United States and China. If economic statistics have any power in the talks at this stage, China’s leaders might be more inclined to agree to a deal by December 15 in order to avoid the further damage to China’s economy that the imposition of another round of tariffs on that date would inflict.
Whether that prospect would be enough at this stage of resolve the conflict between the two countries over when and how quickly tariffs already in place would be rolled back by the United States is completely uncertain since that decision involves not just current current statistics but long-term trade strategies and national posturing on both sides.
What we do know for certain is that every day brings December 15 another day closer.
