China’s foreign trade is likely to have remained depressed in June. According to the latest trade reports from Taiwan and South Korea, some recovery signs were seen in Asia’s electronics supply chain. But China’s manufacturing PMI report continued to imply weak foreign demand. The apparently conflicting reports possibly imply overall weak global demand but sluggish pace of rebound in the electronics sector, said Societe Generale in a research report.
Hence, China’s merchandise exports are expected to have increased 1.9 percent year-on-year in terms of renminbi last month, as compared with May’s 1.2 percent year-on-year growth, according to Societe Generale. However, it is suggesting a weakening momentum on sequential basis.
Meanwhile, imports are expected to have shrunk again by 1.2 percent year-on-year in renminbi terms, as compared to the unexpected 5.1 percent year-on-year growth witnessed in May. However, this is likely to be mainly because of a negative base effect, whereas the month-on-month growth is likely to be a tad above average, noted Societe Generale.
