China: Trade Data Revives Economic Growth Fear Worldwide
Chinese stocks and commodities weakened after poor trading in the country and global fears of economic growth continue.
Many countries are dependent on China’s trading and economic stability, as the country is known for its exporting business, with the US and other Asian nations dependent on it.
To avoid further risk, China is looking at investing in traditional assets, including the Japanese Yen and government bonds.
Analysts revealed that the country’s exports recently declined by 25.4% in February, while its imports fell by 13.8%, predicting a bigger economic slump for China. The on-year export drop last month was the steepest it has dropped since 2009.
One of the economies that has been greatly affected by China’s monetary value is Japan.
At the moment, Japan is struggling in pushing inflation, with the consumer price index increasing by 0.1% late last year. Japan is still lagging behind the 2% inflation goal set by the Bank of Japan (BOJ).
There are various economic indicators affecting the Japanese economy, such as GDP, unemployment rate, money supply, and consumer confidence. Traders in the country use the following indicators to make better-informed trades.
Same goes for those trading in China, knowing the Key indicators of the economy allow them to make quick judgments as its economy continues to challenge local and foreign traders.
Last week, the equity index of Shanghai Composite only rose by 0.1%, the Hang Seng of Hong Kong lost 0.7%.
“Investors see the data as the latest sign of weakening global trade amid a slowing of the world’s 2nd-biggest economy as it transitions from the developmental phase to more consumer-led demand,” according a media report.
While highly unusual, the severe fall in exports was in time for the 2016 Lunar Year in China.
Last year, the Chinese New Year was able to help the county’s exports jump by 48.9% based on year-on-year report. However, even with this auspicious occasion, the country’s export rate revealed it dropped to its lowest rate this year.
External demands for Chinese goods is said to raise doubts about the trading situation in China.
“The unfavorable base effect and Chinese New Year distortions aside, we believe that the extremely weak external demand is still the main reason for weak exports. This is also evidenced by a sharper fall in ordinary exports, as well as similar export contractions in other Asian counties’ trade data,” said HSBC economists.
Chinese’s Dow fell 100 points due to oil prices and deep prices in trading, affecting US stocks trading and many Asian economies will drop further at the start of the 2nd week of March.
Stay tuned…
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