Goldman Sachs predicts China's trade surplus to expand in the next few months
Source: Internet
Author: User
KeywordsGoldman Sachs trade surplus
The downward trend in China's trade surplus in recent months seems to be a positive sign that the economy is becoming more balanced, Goldman Sachs reported January 11. A seasonally adjusted trade surplus is likely to widen again over the next few months. However, the seasonally adjusted surplus may still be on the decline. According to the General administration of customs data, China's export growth in December 2010 fell from 34.9% in November to 17.9%, the implied quarterly year-on-year increase from November to 109.3% to 5.2%; December import year-on-year growth from November 37.7% to 25.6%, The year-on-year increase in the quarter was reduced from 126.7% in November to 26.6%. The December trade surplus fell to $13.1 billion from $22.9 billion in November, and the annual trade surplus in 2010 was 183.1 billion dollars. The December trade surplus fell to $9.1 billion from $12.3 billion in November. Goldman Sachs pointed out that the main driving force for import growth in December was that China's domestic demand was so strong that supply was restrained by the restriction on energy-saving targets and the Asian Games, so the current strong import growth is unsustainable. Goldman Sachs said that too strong import growth also tended to lead to higher import prices and a worsening of the terms of trade (export prices and import prices), thus causing direct wealth losses to the Chinese economy. With the new year at least some of the restrictions will be abolished, and the government will take more measures to curb domestic demand to control inflation, may see the next few months after the quarterly trade surplus expanded. However, seasonal effects may still show a downward trend in the surplus level without quarter. Goldman also noted that the year-on-year decline in export growth was mainly influenced by the high base, while the quarter-on-quarter growth slowed after unusually strong growth in 10 and November. The fundamental growth trend in exports remains strong, with Goldman's global lead and PMI export order ingredient indices showing strong growth momentum out of demand. Goldman Sachs believes that the government's interpretation of the data will also take into account the year-on-year base effect, so it is not necessarily because of renewed fear of export growth prospects change the exchange rate and other macro-policy. In view of this, Goldman maintains a 6% per cent appreciation of the renminbi against the dollar over the year. Goldman Sachs also said in its report that while the high base also led to a slowdown in imports year-on-year growth, but unlike exports, its monthly growth rate remained very strong. This is partly due to higher prices for imported raw materials pushing up import prices. Since the publication of the trade Price index usually has a half-month lag, it is not possible to determine the real import growth after a price adjustment for the time being. However, Goldman's estimates suggest that real import growth is likely to remain robust, although the December PMI weakness bodes well for domestic demand.
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