China: Smaller than expected trade surplus - BBH

Research Team at BBH notes that the China reported its November trade figures and the surplus was smaller than expected at $44.6 bln (compared with $49.06 bln in October). 

Key Quotes

“Both exports and imports rose.  Exports rose for the first time in seven months on a year-over-year basis, even if just barely (0.1% in dollar terms).  Imports rose 6.7%, the most in two years.  Imports of copper, iron ore and coal rose.  The impact on either the dollar-bloc currencies, like the Australian dollar or metal producers like the South African rand, has been muted.”

“Since the end of July 2015, the yuan has fallen 9.7% against the US dollar.  This may help Chinese exports, especially as China continues to evolve away from simple assembly work and toward more value added.  However, as many other countries have found, the linkage between currency valuation and exports is far from simple or straightforward.  There is little substitute for stronger demand.”