Chinese exports and imports declined in June 2016, as the weak demand at home and abroad continue to weigh on the world’s second largest economy. In dollar terms, the exports decreased by 4.8% yoy, while imports recorded a decline of 8.4% yoy. Thus, the trade surplus shrank to 48.11 billion USD. In Chinese yuan, the situation is better due to the weakened currency, as exports grew by 1.3% yoy and imports decreases by 2.3% yoy with trade surplus 311.2 billion CNY.
Last week, the yuan fell the fifth consecutive week, which was the longest losing streak this year and signaled that Beijing is more tolerant of further weakening of the currency. A cheaper yuan can promote exports if its level is maintained, especially if global demand fails to keep volatility lately, including the outcome of the British referendum.
Today’s trade data clearly illustrate the impact of rapid devaluation of the yuan, as exports improved and imports decreased further. In the statement to the customs authorities is written that China “sees obvious obstacles in international trade amid acute and complex environment”.
The exports to USA fell by 10.4%, while that for Brazil recorded a decline of 21.5%. The imports from Canada collapsed by 44.6%, while to US fell by 12.7%.
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