In spite of the explosion wider in the US Trade deficit after a sharp narrowing in the previous month, Chinese imports and exports continue to contract on an annualized basis. The latest figures released overnight showed that imports slumped -16.2% year over year, missing forecasts of a -12.0% decline and falling below the prior figure of 12.7%. Although exports did not tumble below the prior figure of -15.0%, the -6.4% contraction was well off the expected 2.4% expansion. This comes on the heels of announcements from China stating that the nation will choose to focus on fiscal stimulus versus monetary policy vis-à-vis interest rate cuts and reserve ratio requirement reductions to fight the slowdown. The real estate sector continues to provide headaches for the government as an economy plagued by overcapacity is facing the slowest growth in over 20 years.
Chinese Imports Slump
Daily Analysis - 08/05/2015