Chinese trade data released in October showcased both positive and negative trends for the country’s economy. While Chinese exports experienced a sixth consecutive month of decline, dropping by 6.4% compared to the same period last year, imports unexpectedly rose by 3%. The better-than-expected growth in imports suggests a potential boost in Chinese consumption, which can benefit e-commerce giants like Alibaba (BABA) and JD.com (JD). However, these positive developments did not prevent stock prices from falling for these companies, as well as other tech names such as Baidu (BIDU).
Impact on Alibaba and JD.com Stocks
During Hong Kong’s trading session on Tuesday, Alibaba’s stock value fell by 2% while JD.com experienced a decline of 2.2%. This downward trend continued during early premarket trading for their American depositary receipts (ADRs). The Hang Seng Index also closed 1.7% lower. Despite the positive implications for e-commerce stemming from increased imports, these companies were unable to escape the broader market’s performance.
Analysis of Import and Export Trends
CMC Markets analyst Michael Hewson pointed out that the rise in imports may indicate a return in domestic demand, which is a positive sign. However, the slump in exports raises concerns about weak global demand. Hewson further stated that this could indicate that global demand is likely to remain weak and not pick up in the near future.
IMF Upgrades Growth Forecast for China
Despite the mixed results, the International Monetary Fund (IMF) has upgraded its growth forecast for China. The organization cited the recent performance of the Chinese economy and measures taken to support its struggling property market. The IMF now expects China’s gross domestic product (GDP) to reach a growth rate of 5.4% in 2023, higher than its previous forecast of 5%. Furthermore, it predicts growth of 4.6% in 2024, an increase from its earlier forecast of 4.2%. However, this positive news did not translate into immediate gains for Chinese stocks on Tuesday.