Canada Wood Today | The Canada Wood Group

China Economic Update

Eric Wong

By Eric Wong

Managing Director, Canada Wood China

January 29, 2019

2018 Q4 highlights:

  • China’s economic growth edged down in Q4 2018 year-on-year due to weak investment and faltering consumer confidence, which led to the weakest annual growth in 2018 within the past 28 years; GDP in Q4 2018 grew 6.4 percent, compared to 6.5 percent in Q3, hitting a record low since the global financial crisis in September 2008.i
  • China’s economy grew at the slowest pace since 2009 due to financial deleveraging and a trade dispute with the United States. However, Q4 figures suggested a slow increase after government initiatives to shore up economic growth, and a buffer against a sharp slowdown with the country’s solid financial and fiscal status.ii

The PMI (Caixin) index dropped unexpectedly to 49.7 in December 2018 compared to 50.2 in the previous month, missing the market consensus of 50.1iii. China’s exports fell 4.4 percent year-on-year to USD $221.2 billion in December 2018 with a weakening demand in most of its major markets; the figure was below market consensus (up 3 percent) following a 5.4 percent increase the previous month.iv

The China Consumer Price Index (CPI) decreased to 101.9 in December 2018 from 102.2 month-to-month.v USD/CNY fluctuated in Q4 2018, with the exchange rate increasing from 6.87 (October 1) to 6.97 (November 1) and decreasing slightly to 6.95 on December 1;vi CAD/CNY was on a decreasing trend in Q4, from 5.35 (October 1) to 5.30 (November 1) and it continued to fall to 5.23 on December 1.vii

China’s Wood Importsviii

A total of 212 return-block trains of Russian lumber has been shipped to Chengdu since March 2018, according to Chengdu International Railway Port Investment and Development. Those block trains were imported to China through four China-Russia land ports: Erenhot, Alataw Pass, Manzhouli and Suifenhe.

Softwood lumber inventories at Taicang port and its surrounding area were 920,000 cubic metres in late December 2018, down 4 percent month-on-month. The figure represented the lowest volume of lumber inventory since February 2018.

Radiata pine log inventories from New Zealand and Australia totaled 1.65 million cubic metres in late December 2018, down 3.9 percent month-to-month. It accounted for more than 57 percent of the total log inventory.


i Kevin Yao (January 21, 2019). China’s economy cools in Q4
ii Focus Economics (January 21, 2019). China: Economic growth continues to decelerate in Q4
iii Trading Economics (January 20, 2019). China Caixin Manufacturing PMI
iv Trading Economics (January 20, 2019). China Exports
v Trading Economics (January 20, 2019). China Consumer Price Index (CPI)
vi XE Currency Charts: USD to CNY
vii XE Currency Charts: CAD to CNY
viii Wood Markets/FEA (January 2019). China Bulletin