Asia Stocks Rise as China Trade beat expectations
Asian stocks rose after Chinese trade data beat expectations with exports up 9.7% and imports down 2.3% from a year earlier yet shrank much less than forecasted. Analysts say a continued fall in imports reflected the impact of the continuing plummeting world oil prices, with energy companies dropping as oil traded at the lowest in more than 5 1/2 years.
The smaller fall in imports compared to November figures was largely due to an upturn in commodity purchases, and analysts noted sliding prices had been a net benefit by reducing import costs.
Net exports are providing a positive contribution to the Chinese economic growth at a time when domestic demand has been lessening, particularly due to the slowdown in the residential construction sector.
China imported 30.37 million tonnes of crude oil in December, or 7.15 million barrels per day, a first for them, as the world’s largest oil importer took advantage of low global prices to fill its strategic reserves. It also purchased a record high volume of iron ore. Energy analyst, Nelson Wang of CLSA Research say “the jump in commodities imports was a big boost to overall trade figures (but) is not a reflection of underlying demand”.
Officials were cautious when discussing how much positive momentum trade will deliver.
Policymakers are trying to steer China, the world’s second-largest economy through a soft patch as it confronts weak demand and a slowdown in its property market.