The slowdown in export growth is expected to improve this year

The General Administration of Customs recently released China's import and export data for the first two months of this year. China's export slowdown has become the focus of attention. In this regard, some experts recently told "China Trade News" reporter said, weak external demand, high base, Spring Festival factor disturbance is the first two months of this year export decline main reasons.

According to statistics released by the General Administration of Customs, China's import and export value in the first two months of this year was 6.18 trillion yuan, down slightly by 0.8 percent year-on-year. Of which, the export was 3.5 trillion yuan, up by 0.9%; Imports were 2.68 trillion yuan, down 2.9 percent. Trade surplus reached 810.32 billion yuan, up 16.2 percent. In dollar terms, China's import and export value in the first two months of this year was 895.72 billion US dollars, down 8.3%. Among them, the export was 506.3 billion US dollars, down by 6.8%; Imports totaled 389.42 billion U.S. dollars, down 10.2%; The trade surplus increased by 6.8% to US $116.88 billion.

Zheng Houcheng, director of Yingda Securities Research Institute, believes that global trade is interconnected, and China's export growth in the first two months dropped 6.8 percent in dollar terms, basically in line with expectations. The Reuters Commodity Research Bureau Index (CRB) was 11.9 percent and 2.64 percent year-on-year in the first two months, well below the same period in 2022. Although the recent rebound of the US ISM manufacturing purchasing managers Index (PMI) and Markit manufacturing purchasing Managers Index (PMI), both remained below the line of expansion and contraction for four consecutive months, indicating relatively weak macroeconomic demand in the US. During the same period, Korea s export value was -16.6 percent and -7.50 percent year-on-year, respectively, which are historically low. From the historical trend, China's export growth and South Korea's export growth is highly correlated.

Wang Jing, of the Bank of China Research Institute, said that although there were signs of a pick-up in international demand in the first two months, it was not yet solid. The global manufacturing purchasing managers' index (PMI) came in at 49.9 percent in February, up from December 2022 but still in contraction territory. Consumer confidence in the US, EU and Japan, while improving month-on-month, remains at historically low levels. In another sign that international demand remains weak, South Korea's exports fell 7.5 per cent in February from a year earlier. In addition, the high base in the same period of last year and the seasonal impact of the Spring Festival holiday is larger than in previous years are also important reasons for the export decline in the first two months. From January to February 2022, China's export growth rate averaged 15% in dollar terms. This year, China's novel coronavirus prevention and control policy has been changed, and the related epidemic situation has been stable. Employees of enterprises are strongly willing to return home for the Spring Festival. This also makes many domestic foreign trade enterprises, especially labor-intensive enterprises, have a long period to resume work and production after the holiday, which has a certain impact on the export supply of products.

Looking into the future, Zheng Houcheng believes that under the background of continued high interest rates in the United States and even the US and European central banks continue to raise interest rates, it is difficult for jpmorgan Chase global manufacturing purchasing managers index (PMI) to rise significantly in March, and under the background of two consecutive months of negative international oil prices, it is expected that the CRB index will continue to decline and enter negative territory. This means that our country export growth rate is still facing the pressure from quantity and price, and a great probability will decline in the first two months.

In Wang Jing's opinion, China's export growth may continue to be under pressure in the short term, and is expected to gradually improve in the second half of the year. She said inflation in advanced economies in Europe and the US had fallen but remained in a high range. In the first half of 2023, the Federal Reserve and the European Central Bank are still likely to raise rates in "baby steps." This restrains international demand and puts Chinese export growth under pressure. But at the same time, it should be noted that the pace of interest rate increase in the European and American economies tends to slow down, the market is widely expected to end their interest rate increase cycle in the second half of the year, and their destocking cycle is gradually coming to an end, consumer confidence is gradually improving, and international demand is expected to pick up in the second half of the year.

"In addition, domestic demand in ASEAN economies continues to be strong, and there is still more cooperation than competition between China and ASEAN countries in the upstream and downstream of the industrial chain, which supports China's export of terminal consumer goods and intermediate goods. The new export orders index rose to a 10-year high in February, rising sharply to 52.4 percent from 46.1 percent in January, returning to expansion territory for the first time since April 2021. "There is a three to six month lag between the new export orders index and the export value growth, indicating that exports may gradually improve in the future." "Wang Jing said.