On Monday, The China’s National Statistics Institution published the export – import data which showed the positive result. It continued the good thing reached before and showed the increase.
The export increases by 27.9 percent year – over – year in May. That was lower than the jump of 32.3% in April. Furthermore, that was also more than the expectation of 32.1% made by some people.
The import sector in that country also shows an increase. It jumped for about 51.1 percent and that became the highest record since January 2011. It means that in 10 years period.
The domestic economy recovery from the COVID-19 pandemic effect is successfully push the goods demands from other countries. It triggered the rising import value last month.
China's Exports Constrained, Trade Balance Still Surplus
The slow down China’s export happened when the exporters are concerning about several constraints. The examples are like the expensive price of the materials and the bad logistic distribution.
Besides that, Yuan currency is also stronger than the US dollar. That condition makes the goods from China is getting more expensive and reduce its interest amidst the global competition.
Generally, the China's trade balance in May was only experiencing a surplus of $45.53 million. That number is far from the expectation of increase from $42.86 milkion to become $50.5 million.
The goods delivery to the United States of America and the European Region becomes the most dominant factor. It is especially to get the trade data report last month. Both factors are importany.
The Coronavirus Case and Biden’s decision
The China’s trading prospect in the future is predicted by several parties. They think that it will still depend on how the governments can handle the coronavirus pandemic properly.
It is because the COVID-19 cases are getting higher and more people are infected day by day. Asian is becoming a region that still faces this problem. The goods export from China to the Asia is not small.
That is why; the increasing coronavirus cases in that area has a potential to stop the positive trend of export. Aside from that, a plan made by Joe Biden as the US president is highlighted.
His government is making a plan to check the trade policy between America and China. That plan has a potential to affect the China’s export – import sector in the future.
The US – China Trade deal will be Ended
Based on the schedule, the trade deal between those two countries are coming to the end. It is especially for the first phase that will be ended at the end of this year or in 2021.
Meanwhile, USD was falling on Friday after the America’s non-farm payroll Data showed the increasing recruitment in May because the pandemic can be handled. Howeber, the increase is not as much as the expectation.
It is especially related to the Fed’s decision that will tighten its monetary policy faster than later. The NFP increased by 559000 jobs which are solid last month. It was helped by the vaccination programs.
The Salary Rate is Quite Disappointing
Edward Moya as a senior market Analyst from OANDA stated that the salary rate in that country is quite disappointing. The weaker report than the expectation is a sign that there isn’t any urgents.
It is especially for the Federal Reserve to start reducing its monthly obligation purchase for about $120 million to support the economic. The bad news for economy is the good news for The Fed.
They are really accommodative and will make dollar is underpressured . Aside from the May increase, the NFP is still in 5% or 7.6 million jobs. That is under a level before the crisis happened.
