Having been alarmed by a near 5pc slide in the yuan since August, investors globally appeared relieved by the stabilisation.
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For the whole year of 2015, exports fell 1.8 percent year on year to 14.14 trillion yuan, while imports declined 13.2 percent to 10.45 trillion yuan. US stocks are opening higher, led by gains in big technology companies, which have had a rough start to the year.
The liquidity squeeze in the offshore market has narrowed the gap with the onshore market, and on Thursday the offshore yuan was trading 0.3 per cent below the onshore spot at 6.6080 per dollar. Calculated in USA dollars, Chinese exports fell 1.4% from a year earlier, while imports fell by 7.6%, vs. expectations in a Reuters poll of analysts for exports to fall by 8% and imports to fall 11.5%. New yuan loans and money supply trailed forecasts in December even as the broadest measure of new credit surged the most since June, data showed. We are now experiencing the second global stock market downturn within six months provoked by falling stock prices in China and linked to concerns that the Chinese economy is slowing.
The People’s Bank of China has been actively depreciating the Yuan to help support the country’s exporters.
Despite the turmoil in the Chinese financial markets, there hasn’t been a major deterioration in its economy in recent months, Daniel Martin, a Senior Asia economist at Capital Economics, said.
Asian share markets were buoyed early on Friday after oil prices ended an eight-day rout, though China’s main stock indexes were slightly lower after a late rally on Thursday.
In contrast, exports of seven traditional labor-intensive products including clothing and shoes fell 1.7 percent to 2.93 trillion yuan, accounting for 20.7 percent of the total exports in 2015.
The U.S. dollar and commodity-based currencies including the Australian and Canadian dollars rose against the yen and euro on Wednesday as the Chinese yuan steadied and oil prices jumped, increasing the market’s appetite for assets that provide higher yield.
China remains a key engine of global growth, despite the slowdown in economic activity.
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The Shanghai Stock Exchange Composite Index lost 2.4% to 2,950 and the Shenzhen Stock Exchange Composite Index tumbled 3.5% to 1,791. Recently the yuan trade numbers come first followed as much as an hour later by figures in US dollars.
