Modest improvement likely in China's trade growth

China's export growth is expected to turn positive in June after a three-month contraction but the improvement is likely to be only gradual. The latest data from other Asian economies suggest that global trade demand remained soft in June. China was probably not immune. 

"1% yoy and -1.1% mom is forecasted, both of which are weak compared to historical averages", says Societe Generale. 

As for imports, commodity price deflation should have continued to play a big role in depressing headline growth, while domestic demand was slowly recovering, as suggested by the disappointing export data from Taiwan and Korea. 

"Yoy growth is expected to move from -17.6% to -14%, which is better but not by much", added Societe Generale.