China’s exports grown year-on-year in Q1 2018, iron ore imports likely to rebound in months ahead

In all, China’s exports kept its decent growth in the first quarter of this year, in spite of a contraction in March. Exports rose 7.4 percent year-on-year in the first quarter, nearly in line with the rate recorded in the last quarter of 2017, implying a still decent performance, noted ANZ in a research report. High-tech exports were up 20 percent year-on-year, adding 5.7 percentage point to overall export growth. However, exports in March indicated a contraction of 2.7 percent year-on-year, with exports to the EU, US and Japan down by 7 percent year-on-year, 5.6 percent year-on-year and 3.7 percent year-on-year. But the March data so far do not show signs of particular softness in any specific export sector.

High-tech product imports led to a recovery in March imports, implying an upgrade in import structure against domestic economic transition. High-tech imports rose 25.6 percent year-on-year in March, adding 7.6 percentage points to overall import growth. Electronic products’ imports added 15 percentage points in total. This implies that China’s import structure is slowly being upgraded along the value chain on the back of the change in the nation’s domestic economic structure.

However, major commodity imports show divergence. While coal imports saw double-digit growth for the third straight month, iron ore imports fell 10.2 percent year-on-year. Iron ore imports might rebound in months ahead when the construction season begins, stated ANZ in a research report. However, the recovery is not expected to be as significant as early last year because investment will not take a leading role in driving growth this year amid structural reforms, added ANZ.

At 20:00 GMT the FxWirePro's Hourly Strength Index of Chinese Yuan was bearish at -75.8119, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -28.4177. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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