Citibank: China’s trade performance to be impacted by headwinds

Citibank’s analysis team suggests that China’s trade performance in 2019 will be weighed down by strong headwinds, in spite of the robust trade data in January.

Key Quotes

“The outcome of US & China trade talks on 1 Mar will swing significantly on our outlook.”

“If the two countries were to reach a minimal agreement with no additional 15% tariffs being levied on the US$200bn Chinese exports to the US, the sentiment on China economy would likely improve.”

“Foreign manufacturing MNCs may slow their pace to move out of China; RMB could continue its current appreciation path on the expected April bond index inclusion by Bloomberg-Barclays & reweighting of MSCI.”

“If both countries were unable to reach an agreement, growth slowdown would intensify & USDCNY could depreciate towards 7 again. In response, the Chinese government would announce more aggressive policy stimuli to mitigate the negative impact from tariffs.”