Our leading indicators and detailed imports data are suggesting that the momentum of China’s nominal exports should continue to improve over the next few months. We expect China exports to accelerate to 15-18% y/y over the next few months.
Nominal exports on a seasonally adjusted 3m/3m basis have been rising for the months of October and November. We expect this positive momentum to continue into Q1 12.
This is particularly the case since China’s exports lags the US and Japan business cycle by around 3 months. With US and Japan GDP growth showing improvement in H2 11, the impact on China’s exports will be felt over the next few months.
In addition, with our positive view on the outlook for growth in Asia, this will also support our positive outlook on China exports.
As a result, the downside risks to China’s exports from a further slowdown in Europe can be mitigated by the improvement in data in the US, Japan, and Asia in our view, unless a banking or market crisis occurs in Europe.
China November exports and imports surprised high and were even higher than our above consensus estimates of 13% and 20%, respectively. The prints were 13.8% (BBG 10.9%) and 22.1% (BBG 18.8%) for exports and imports.
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Skandinaviska Enskilda Banken AB