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China: Trade Data Implications
- The inescapable implication of the trade statistics is that the domestic sectors of the economy may still be weakening, which in view of the visible softening of exports translates into the strong likelihood that real-GDP growth is still slowing, i.e., no soft-landing yet, even if one could still occur in coming months.
- As regards policy, the data suggest that some easing will probably be required to stabilize growth and minimize the risk of a hard-landing. The policy change would have to include a measure of easing on the monetary side, which recent data suggest has just begun to occur, but only at a very modest pace.