Asian trade stabilising – ABN AMRO

Han de Jong, the chief economist at ABN AMRO, notes that China's imports (in USD) ware down 5.6% yoy in July after -7.4% yoy in June.

• “The July reading was not great, but at least the data is suggesting things aren’t getting an awful lot worse either. The caveat here is that this data is about the period before the latest escalation of the trade war. Chinese imports from the US remain under huge pressure. The value of American products imported by China was down 19.1% yoy (in USD).  If you think that sounds bad, remember that the average for the year is actually -28%, so the July number may perhaps be called promising.
• Taiwan’s trade statistics also allow for an analysis of what is going on with world trade. In this case, I tend to look more at exports than at imports. Taiwan’s exports were down 0.5% yoy in July, slightly better than the average for the year so far: -3.1%.
• A big caveat beside these trade numbers is that they all relate to before the latest escalation of the trade conflict. We will have to wait and see what happens after. We, for one, are not waiting for the data to adjust our global growth forecast and have taken a few tenths off forecasts. However, we continue to think that recessions with a material contraction in output and a material rise in unemployment in key economies is unlikely before the end of our forecast period out to the end of 2020.”