(eToro Blog) China reported that its trade surplus widened in December and beat analyst expectations. Exports remained strong despite a global financial slowdown and imports weakened. December trade surplus grew to $16.52 billion, coming in much higher than analyst expectations of trade surplus of $8.3 billion. Exports in December rose 13.4% on an annualized basis, similar to the 13.8% growth seen in November. Imports in December rose 11.8% on an annualized basis, much lower than the 22.1% growth seen in November.
Today’s data shows that the Chinese economy will go through a soft landing in 2012 amid slowing down in demand. Economists also noted that some exports may have been shifted forward because of the Chinese New Year which is going to be in late January. The euro zone was China’s main trading partner with $567.21 in shipments during the full year. The U.S. came was next with $446.65 billion.
China’s imports fell to a two year low in December. This hurts countries such as Australia. Australia supplies much of the natural resources needed to fuel China’s growth. Economists warn of the ripple effect a slowdown in China will have on commodity exporting nations such as Australia and New Zealand. Economists predict that China’s growth will be less than 8% in the first quarter of 2012. The Government of China will announce fourth quarter GDP on January 17th which is expected to show a print of 8.7%.
China’s Central Bank lowered the reserve ratio for banks to encourage lending. This was the first time in three years that the Central Bank has shifted to a dovish stance.
Asian markets closed higher with the Nikkei up 0.38%, the Hang Seng up 0.73%, the Shanghai index up 2.69% and the Australian S&P ASX up 1.08%. Traders on OpenBook are primarily short on the AUDUSD with average limits at 1.0200 and stops at 1.0350.
Copyright 2012 eToro Blog
