The data for February suggested a rapid 48.3% uptick of Chinese exports, marking one of the few positive economic headlines for the nation in recent weeks. That figure beat the market’s far more timid expectation 13% export growth. On the heels of a marginal decline in January, this turn of events – while perhaps temporary – feels quite crucial for a nation that is currently confronted head-on with the specter of slowing growth.
That said, the same report also showed a substantial 20.5% decline in imports. While a growing trade surplus possibly might help top-line GDP figures in the short-run, it also puts upward pressure on the yuan which could harm future exports. Furthermore, when you see import numbers like those, the question of domestic consumption also looms large. Though consumption does not yet take a particularly substantial portion of Chinese imports, one would hope to see at least some positive momentum in that category as the nation transitions away from an investment driven economy.
Trade-weighted, inflation-adjusted exchange rate graph inserted by the Prof