China's imports unexpectedly fell the most in eight months in November while activity overall in emerging markets slowed.
China's imports unexpectedly dropped 6.7% in November from a year ago, raising concerns about the short-term outlook for the world's second-largest economy.
China's exports rose 4.7% year on year to US$211.66bn in November, the General Administration of Customs (GAC) said Monday.
The growth rate for November decelerated compared to October's 11.6% and 15.3% in September, according to the GAC. Imports stood at $157.19bn, down 6.7%.
In the first eleven months of the year, China's imports and exports hit $3.9tn dollars, up 3.4%, also recording a trade surplus of $332.5bn during the January-November period, up 42.2% year on year.
"Export growth was significantly weaker than expected. The fall in growth partly reflects the easing of distortions caused by the round-tripping of precious metals to avoid capital controls, which inflated the trade figures in previous months. That said, the magnitude of the fall suggests that underlying export growth has weakened, too," Julian Evans-Pritchard, China economist at Capital Economics, in an note as reported by Reuters.
"Import growth fell even more sharply. The easing of round-tripping is likely to have played a role here too. And falling commodity prices, which will have weighed on the value of commodity imports, is almost certainly to blame as well. But the sharp fall also hints at a further cooling of domestic demand.
"Despite today’s data, we still expect exports to fare reasonably well going forward given that global growth looks set to continue to recover next year. In contrast, import growth is likely to remain weak given the ongoing structural slowdown in investment."
Meanwhile Markit reports that output growth in global emerging markets slowed further in November, according to HSBC survey data. The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI (purchasing managers' index) surveys, slipped for the second month running to 51.2, signalling the weakest rate of expansion since May. The EMI remained well below its long-run trend level of 53.7, and 2014 looks set to record the lowest annual average for the Index since its inception in November 2005.
Manufacturers and service providers in emerging markets both registered slower, identical rates of output expansion in November.
Data for the four largest emerging economies showed contrasting activity trends in November. China registered growth for the seventh month running, but at the weakest rate since May. India posted the fastest growth since June, while Russia and Brazil both registered sharper rates of decline.
On a brighter note, new business growth picked up from October’s five-month low, with both manufacturing and services showing faster rates of expansion. That said, backlogs of work fell at the fastest rate since July 2013 and employment declined for the first time since May.
Inflationary pressures remained subdued in November. Input price inflation edged up to a three-month high, but remained historically weak. Output prices rose following October’s decline, but at only a marginal rate.
The outlook for global emerging markets deteriorated in in November. The HSBC Emerging Markets Future Output Index, which tracks firms’ expectations for activity in 12 months’ time, fell to a new record low since its inception in April 2012. All four of the largest emerging economies posted weaker sentiment in the latest period, most notably Russia and Brazil. China posted the lowest output expectations since the composite manufacturing and services series began in April 2012. Meanwhile, Saudi Arabia and the UAE saw non-oil output expectations moderate during November, while South Africa registered the strongest sentiment in over two years