China exports strong, trade surplus surges

Export growth improved 15.1% compared with January and February in 2014.  In December, total exports expanded 9.5% y/y.
 
For January and February as a whole, imports contracted 20.4% y/y compared with the same two months last year after contracting 2.3% y/y in December last year. 

The weakness in import growth is partly explained by lower import prices. In January import prices declined 9.6% y/y while export prices increased 0.6% y/y.
 
Danske Bank notes as follows on Monday:

• In our view, the foreign trade data for January and February probably exaggerate both the strength in exports and the weakness in imports and there probably will be some pullback in March.
• Nonetheless, exports appear to be doing relatively well, with strong gains in particularly to the US and the ASEAN countries. However, exports to Europe are also improving and exports to Japan appear to have stabilised. The foreign trade data for 2015 so far does not support the case for a weaker CNY. Exports appear to be doing reasonably well and the trade balance surplus is surging. 
  
  
• We think this buoyant surplus will eventually outweigh the current capital outflows, which we expect to subside.