渣打研究报告China – No trade revolution.pdfVIP

| On the Ground | Analyst Stephen Green, +86 21 6168 5018 Standard Chartered Bank (China) Limited Head of Research, Greater China Stephen.Green@ China – No trade revolution 14:30 GMT 20 January 2010 The strong headline December export numbers hide a duller reality There does not seem to be an ‘Asian Chinese New Year’ effect While the trade recovery continues, exports may be over a year from their previous USD peak Does China’s December trade data herald a revolution in the country’s growth outlook? The headline export growth number, 17.7% y/y, was surprisingly high, as we have previously noted (On the Ground, 11 January 2010, ‘China – December trade data soared. Why?’). There is anecdotal evidence of stuff being crammed onto boats at short notice in December, which supports the view of a sudden acceleration in exports. Trans-pacific freight rates unexpectedly rose as a result, apparently. Markets got more excited about possible CNY appreciation on the back of this. In today’s note, we pour some cold water on this excitement. First, Chart 1 shows the seasonally adjusted US dollar value of both processed and non-processed exports through to December 2009. Neither boomed at the end of last year; a better way to describe their trajectory would be that they ground up, very gradually. The stellar year-on-year growth rate was rather due to the collapse in China’s exports starting in November-December 2008, which caused the y/y rate to spike up. Late orders perhaps helped an otherwise poor set of numbers, rather than signalling a sudden improvement. In other words, overseas retailers (especially in the US) scrambled to catch up with better-than-expected