Canaccord Genuity Morning Coffee on China Trade: It Ain't All iPhones
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Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
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Canaccord Genuity Morning Coffee on China Trade: It ain't all iPhones (Nasdaq: AAPL).
China's exports and imports grew at their slowest pace in more than two years in December, underpinning hopes for more policy support from the government. Chinese exports grew 13.4% year-over-year (YoY), while imports grew 11.8% YoY in December. Export growth was in line with expectations, but import growth decelerated much faster than the 18% YoY gain expected, which many believe reflects the slowdown in domestic investment demand and weaker commodity prices. The monthly trade surplus was at US$16.5 billion, up from US$14.5 billion in November. For full year 2011, the trade surplus was at US$154.9 billion (2.1% of GDP). This is the third-consecutive year of a declining trade surplus for China, down from the high of US$298 billion (6.6% of GDP) in 2008. For full year 2011, exports gained 20.3% and imports gained 24.9%; though both moderated from 2010, they remained resilient. Credit Suisse Chief Economist for Non-Japan Asia Dong Tao, one of the only guys to have a true handle on China, says although trade growth is expected to slow further, he does not think it will experience the collapse seen in Q4/08 and Q1/09, which was caused by a sudden crunch in trade finance. While the EU economy is likely to enter a mild recession, the U.S. economy has shown signs of resilience lately, helping to provide some support to global demand. Nonetheless, Dong expects exports to soften further up to Easter and clarity is low beyond that. On imports, the domestic orders for steel, cement and automobile have been very poor, and the situation in infrastructure investment and home sales are lagging expectation. Combined with falling commodity prices, imports may see more deceleration. The trade surplus will likely narrow but stay afloat as both exports and imports fall."
China's exports and imports grew at their slowest pace in more than two years in December, underpinning hopes for more policy support from the government. Chinese exports grew 13.4% year-over-year (YoY), while imports grew 11.8% YoY in December. Export growth was in line with expectations, but import growth decelerated much faster than the 18% YoY gain expected, which many believe reflects the slowdown in domestic investment demand and weaker commodity prices. The monthly trade surplus was at US$16.5 billion, up from US$14.5 billion in November. For full year 2011, the trade surplus was at US$154.9 billion (2.1% of GDP). This is the third-consecutive year of a declining trade surplus for China, down from the high of US$298 billion (6.6% of GDP) in 2008. For full year 2011, exports gained 20.3% and imports gained 24.9%; though both moderated from 2010, they remained resilient. Credit Suisse Chief Economist for Non-Japan Asia Dong Tao, one of the only guys to have a true handle on China, says although trade growth is expected to slow further, he does not think it will experience the collapse seen in Q4/08 and Q1/09, which was caused by a sudden crunch in trade finance. While the EU economy is likely to enter a mild recession, the U.S. economy has shown signs of resilience lately, helping to provide some support to global demand. Nonetheless, Dong expects exports to soften further up to Easter and clarity is low beyond that. On imports, the domestic orders for steel, cement and automobile have been very poor, and the situation in infrastructure investment and home sales are lagging expectation. Combined with falling commodity prices, imports may see more deceleration. The trade surplus will likely narrow but stay afloat as both exports and imports fall."
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