Risks rise as China's exports slumpChina's exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world's second-largest economy in 2019 and deteriorating global demand.
Adding to policymakers' worries, data on Monday also showed China posted its biggest trade surplus with the United States on record in 2018, which could prompt US President Donald Trump to turn up the heat on Beijing in their bitter trade dispute.
Softening demand in China is being felt around the world, with slowing sales of goods from iPhones to automobiles, prompting warnings from the likes of Apple and from Jaguar Land Rover, which last week announced sweeping job cuts mostly in Britain.
China's December exports unexpectedly
fell 4.4 percent from a year earlier, with demand in most of its major markets weakening.
Imports also saw a shock drop, falling 7.6 percent in their biggest decline since July 2016.
"Today's data reflect an end to export front-loading and the start of payback effects, while the global slowdown could also weigh on China's exports," Nomura economists wrote in a note, referring to a surge in shipments to the US over much of last year as companies rushed to beat further tariffs.
China's customs said yesterday that the biggest worry in trade this year is external uncertainty and protectionism, forecasting the country's trade growth may slow in 2019. China's economy is still growing steadily in 2019, but it faces external headwinds, said customs spokesman Li Kuiwen at a regular briefing.
Meanwhile,
car makers in China will face more fierce competition this year, after a tough 2018 when the world's biggest auto market contracted for the first time in more than two decades.
Companies such as homegrown Geely (0175) and Britain's biggest automaker Jaguar Land Rover have already in recent days flagged caution about China sales in 2019, hit also by Beijing's trade war with the United States.
Car sales fell 13 percent in December, the sixth straight month of declines, bringing annual sales to 28.1 million, down 2.8 percent from a year earlier, China's Association of Automobile Manufacturers (CAAM) said. This was against a 3-percent annual growth forecast set at the start of 2018 and is the first time China's auto market has contracted since the 1990s.
S&P Global Ratings said a
surge in maturities will test Chinese local government financing vehicles. Gloria Lu, senior director of infrastructure ratings said
one-third of total outstanding, or over US$10 billion, will mature this year.Offshore refinancing needs in 2019 will test LGFV issuers' resilience and financial flexibility, as well as their ability to navigate complex rules on transferring funds overseas under various different structures, Lu said.
Meanwhile, China's new refinancing issuance is likely to accelerate this year while LGFVs accept a higher cost for refinancing in current stabilizing sentiment, Lu said.
Source: Reuters
http://www.thestandard.com.hk/section-n ... 0115&sid=2
It's all about "how much you made when you were right" & "how little you lost when you were wrong"