Trade war hasn’t hit China’s appetite for imports

China importsChinese imports are growing faster than expected, according to a recent trade balance report, indicating that tensions with the US over trade have not caused appetite for foreign goods to wane. However, the latest consumer price index (CPI) suggested China’s inflation had risen 2.3% compared with the previous year, which was a faster rate than most economists predicted. The CPI data “indicates a consistent trend of what has been seen throughout other global emerging markets over the past couple of months, with this being that currency weakness is encouraging an increase in inflationary pressures”, said Jameel Ahmad, global head of currency strategy and market research at FXTM, a foreign exchange broker. Inflation is a potential worry for the Chinese economy as rising prices would typically erode profits in China’s private sector. However, Ahmad said there is no sign of an economic slowdown yet. “Imports into China expanded by 20%,” he said, referring to the trade balance report of September 8, “which is more than the expected growth of just below 19% and is a welcome sign […] that the ongoing trade tensions narrative is not slowing down Chinese demand for international goods.” ©2018 funds global asia

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