In brief from a piece by analysts at Saxo Bank:

There is a broad consensus among economists that the reopening of the Chinese economy will be one of the main drivers of global growth in the coming quarters. That’s still uncertain.

local governments’ stimulus is most of the time behind the recovery process.

Domestic consumption and imports are still underwhelmed. That’s the missing part of the Chinese recovery which is absolutely needed for growth to spread across the world.

More (again, in brief):

• One week ago, China posted impressive trade statistics ... surge in exports

and:

• strong GDP growth performance in the first quarter

but:

• is not rising GDP which drives growth across the rest of the world. Rising imports do ... the picture is less positive than exports with a negative print in March at minus 1.4 % year-over-year.

Saxo conclude:

• We still expect Chinese consumption to pick up this year, therefore pushing imports upward. But it will take certainly longer and it will be probably much more complex than the market expects.

This article was written by Eamonn Sheridan at www.forexlive.com.

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