China’s imports of US goods may drop over 10% in Q1 amid virus onslaught - Global Times

• China to honor trade deal despite epidemic, according to experts. 
• Economic experts expressed confidence about the resilience of Chinese economic development.

In an article published in the Global Times, according to a Global Times Source poll, China's imports of US goods are likely to drop over 10 percent year-on-year in the first quarter.

However, according to Seven out of 17 well-known Chinese economists and industry experts surveyed by the Global Times Source, the epidemic, a black-swan event, has brought challenges to China's trade with the US in the short term, but expressed confidence about the resilience of Chinese economic development, which will help drive bilateral trade growth as the government has rolled out measures to secure resumption of factory work.

Key notes

• China's imports of US goods are likely to drop over 10 percent year-on-year in the first quarter as the outbreak of novel coronavirus pneumonia (NCP) delayed some domestic demand.
• There would be a rebound in bilateral trade in the second quarter if the epidemic is contained in a timely manner, as China is committed to the phase one trade deal's implementation.
• Seven out of 17 well-known Chinese economists and industry experts surveyed by the Global Times Source forecast that Chinese imports from the US will fall 10-20 percent on a yearly basis in the first quarter and four believed the drop would exceed 20 percent. But three of them reckoned there would be growth in imports thanks to domestic demand for medical goods amid the epidemic. 
• The remaining few said it was too hard to make predictions or said that the US is not the only country whose trade would be affected as the impact is global.
• Participants included Wei Jianguo, a former Chinese vice commerce minister, He Weiwen, a former senior Chinese trade official, Sheng Songcheng, a former central bank official, Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, and Yang Changyong, a senior research fellow at the Chinese Academy of Macroeconomic Research.

Market implications

Due to the threats to global growth, we are seeing the Chinese yuan and Aussie under pressure while the price of gold has stablised due to fragility in global equity prices. 

• Gold continues to shine-on in the face of the coronavirus