China Trade Data Misses Forecasts: Hang Seng Index Ignores on Stimulus Pledge

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Updated: Dec 10, 2024, 05:25 GMT+00:00

Key Points:

November exports rise 6.7% YoY, down from 12.7% in October, signaling global demand concerns for Chinese goods.
Imports drop 3.9% YoY in November, a sharper fall from October’s 2.3% decline, underscoring economic pressures.
Economist Hai Hong notes rare “moderately loose” policy language, comparing it to 2008 global crisis measures.

China’s Trade Data Highlights Weak Demand: Markets React

China’s US dollar trade surplus widened from $95.27 billion in October to $97.44 billion in November. However, the higher trade surplus stemmed from a larger fall in imports than exports.

Exports increased 6.7% year-on-year in November, down from 12.7% in October, underscoring weak demand for Chinese goods. Imports signaled a sharper fall in domestic demand, declining by 3.9% year-on-year in November after dropping by 2.3% in October. The trade data for November fell short of market expectations, highlighting persistent economic challenges.

The trade data came on the heels of Beijing’s renewed pledge to support China’s economy. On Monday, December 9, the Politburo announced plans to loosen monetary policy in 2025 and implement fresh stimulus measures targeting consumption and broad-based domestic demand.

China USD Trade Surplus Widens on Slump in imports

More information in our economic calendar.

Expert Reactions to Beijing’s Policy Direction

On Monday, two-times economist of the year Hai Hong reacted to Monday’s Politburo announcement, saying,

“Only in 2008/2009 during the global financial crisis did China use words such as “moderately loose policy”. The meeting reiterates stabilizing the housing and the property market, as previous politburo meeting in September did. It also mentions “stimulating consumption” before “promoting investment”.

November’s trade data underscored the need for policy measures to bolster China’s economy. The Politburo’s announcement was timely. The Aussie dollar and the Hang Seng Index showed limited reaction to the weak data.

The Market Reaction to the China Caixin Services PMI

Ahead of the release, the Hang Seng Index advanced by 1.06%, extending its gains from Monday.

Following the trade data, the Hang Seng Index was up 1.07% to 20,632.

Hang Seng Index steady after China's trade data.

Hang Seng Index 5-Minute Chart 101224

China’s trade data also drew interest from the forex markets. The AUD/USD pair briefly climbed to a pre-report high of $0.64422 before falling to a low of $0.64163.

However, in response to the trade data, the AUD/USD fell from $0.64177 to a post-report low of $0.64095.

On Tuesday, December 10, the AUD/USD was down 0.42% to $0.64117. The pullback came ahead of the highly anticipated RBA interest rate decision and press conference.

Aussie dollar dips modestly on China's trade data.

AUDUSD 5-Minute Chart 101224

For expert insights and detailed analysis of the Hang Seng Index and global markets, click here.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.