When China reported another month of foreign exchange outflows Dec. 7, analysts were hoping trade numbers on Dec. 8 would be the saving grace. They were not.
Exports fell 3.7 percent in November, the fifth consecutive decline. Imports dropped 5.6 percent, the 13th consecutive decline.
The drop in activity brought down the trade surplus to $53.5 billion. All three numbers came in below market expectations.
If China has a trade surplus, it means foreign exchange is flowing into the country to counteract outflows of capital.
If trade slows down further, the pressure on foreign exchange reserves and the currency will only get worse.
Macquarie
