China Imports: Slowdown Underway, Weakness Ahead
We expect strong industrial commodity import growth to ebb over the coming months as the Chinese government continues to tighten the screws on the commodities financing trade. China's import growth of industrial commodities cooled in May, with copper shipments rising by 21.2% y-o-y, a sharp slowdown from 84.4% y-o-y in April 2014.
Crude oil import growth will be sustained by increasing demand from an expanding downstream segment. Refined oil imports will continue to contract as local oil demand is met by domestic production and domestic demand growth slows.
China continues to import increasing volumes of agricultural products. Rising imports is a structural trend that will accelerate over the coming years, especially in the cases of corn, wheat, sugar and dairy.
|Economic Rebound To Be Short-Lived|
|China - HSBC Purchasing Managers' Index (PMI) & Industrial Production (% chg y-o-y, RHS)|