China’s foreign trade likely to have rebounded further in sequential terms

China’s foreign trade is expected to have rebounded further in sequential terms in September. Recent trade data from Taiwan and South Korea has indicated additional signs of recovery in Asia’s electronics supply chain.

Export order index in China’s PMI reports also rebounded further and rose to above 50 in September. Thus, China’s merchandise exports are expected to have expanded 4.6 percent sequentially in September, the first time it might have expanded in 2016, according to Societe Generale.

But, the base effect is unfavorable. And thus, the year-on-year growth rate is expected to have weakened slightly to -3 percent in U.S. dollar terms, stated Societe Generale. The scenario for imports is also expected to be similar. On sequential basis, China’s imports are expected to have grown, however, on year-on-year basis, imports are likely to have slowed down in September.