JP Morgan Chase Interpretation China trade data

China trade surplus in February from January to 19.5 billion US dollars narrowed to 8.6 billion US dollars. China's export trade growth rate year-on-year in January from 26.6% to 6.5% substantially, and as commodity prices soared, China trade imports increased by 35.1 percent year-on-year (January to 27.5%).

We expect 2008 to the China trade export growth will slow, but we believe that China trade in February export growth has declined sharply, largely by the two major one-time factors drive::

1. February 2007 China trade exports rose 52 percent, because Beijing is widely expected to cut VAT export tax rebates, China trade exporters competing in the previous export drive. This is in fact the purpose of calculating the February 2008 increase in exports set a higher base.

2. In the first few months of winter snowstorm led to large supply and transport disruption, affecting production and export levels.

We expect March exports of China trade data will rebound, but we still expect, as the OECD (OECD) member economies of slowed down (they account for two-thirds of China's exports), China trade export growth slowdown will be more moderate degree.

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