China's imports and exports increased by 5% in the first quarter, with ships, automobiles and consumer electronics contributing largely

In the first quarter, the total value of China's import and export of goods was 10.17 trillion yuan, a year-on-year increase of 5%. exports were 5.74 trillion yuan, up by 4.9 percent, and imports were 4.43 trillion yuan, up by 5 percent

Text: "Caijing" reporter Zou Biying

Editor|Wang Yanchun

According to data released by the General Administration of Customs on 12 April, in the first quarter, China's imports and exports exceeded 10 trillion yuan for the first time, and the growth rate of imports and exports hit a new high in six quarters. At the same time, in dollar terms, monthly exports fell 7.5% year-on-year in March, lower than market expectations.

A research report by Soochow Macro pointed out that the improved overseas data and domestic PMI (purchasing managers' index) data in the early stage have raised market expectations. The change in the year-on-year growth rate of exports in March compared to the sharp rebound in new export orders in PMI, the improvement of exports from South Korea and Vietnam, and the recovery of the global manufacturing industry lagged significantly, resulting in a significant divergence between the March export data and market expectations.

Specifically, in the first quarter, the total value of China's imports and exports of goods was 10.17 trillion yuan, an increase of 5% year-on-year. Among them, exports were 5.74 trillion yuan, up by 4.9 percent, and imports were 4.43 trillion yuan, up by 5 percent.

However, in March, the total value of China's imports and exports of goods was 356 million yuan, down 3.1% year-on-year. Among them, exports fell by 3.8% and imports increased by 2%. In dollar terms, exports fell by 7.5 percent and imports by 1.9 percent.

Xiong Yuan, chief economist of Guosheng Securities, pointed out to the analysis of "Caijing" that the export reading in March was low, mainly affected by the base and the Spring Festival effect. In March last year, the year-on-year growth rate and value of exports were the highest and second highest in the whole year. In addition, before the Spring Festival, "grab exports", exports will drop significantly after the holiday, and the late Spring Festival in 2024 will have an impact on exports in March. Under the baseline scenario, it is expected that the year-on-year export growth rate may rebound to about 2%-4% in 2024.

Shipbuilding, automobiles, consumer electronics exports boom

According to data from the General Administration of Customs, in the first three months of this year, the year-on-year decline in exports included rare earths, pharmaceutical materials and medicines, beauty cosmetics and toiletries, pulp, machine tools, and automobiles (including chassis). The prices of some commodities fell, and exports outpaced the value of exports, such as natural gas, fertilizers, pulp, coal and lignite.

Xiong Yuan pointed out that in terms of commodities, the export of mechanical and electrical products in March was still resilient, and transportation equipment and electronic products were the main export support. In March, China's automobiles and ships recorded positive growth rates from a high base, with year-on-year growth rates of 28.4% and 34.0% respectively, with a two-year compound growth rate of 69.5% and 56.3%, stronger than the two-year compound growth rate of 36.4% and 43.1% from January to February.

Transportation equipment such as ships and automobiles is still the industry that contributes the most to the growth of exports. According to a research report by the Minsheng Bank Research Institute, the growth rate of China's handheld ship orders will hit new highs in 2023, with a growth rate of 32% in December reaching the highest point of the year. The shipbuilding cycle is generally 10-24 months, and China's ship exports are expected to maintain rapid growth in 2024.

However, the research report pointed out that auto exports maintained positive growth in March, but their growth rate has begun to fall from its high level since reaching a peak of 195.7% in April 2023, and the growth rate has fallen to the bottom of the range in March. On the one hand, it is due to the high base in the same period last year, and on the other hand, Europe and the United States have recently increased sanctions on China's new energy vehicles.

The research report of the Minsheng Bank Research Institute pointed out that in March, mobile phones came out of the negative growth range, and the export value increased by 1.7%, driving the export growth by 0.05%. Since November 2023, the growth rate of global semiconductor sales has increased for four consecutive years. South Korea, the world's leading semiconductor exporter, soared to 66.7% in February. According to historical experience, the upward period of semiconductors generally lasts about two years, and it is expected that China's consumer electronics exports will continue to be hot this year.

According to Xiong Yuan's analysis, this round of semiconductor cycle will start to rise in the second quarter of 2023, and there is greater certainty in the export boom of electronic products in 2024. In March, the export growth rate of China's electronic products, integrated circuits, computers, and LCD flat panel display modules was 11.5%, 4.9%, and 2.9% respectively, and the two-year compound growth rate was stronger than the data performance from January to February.

Exports of labor-intensive products fell significantly in March. According to a report by Industrial Research, the growth rate of exports of clothing and clothing accessories, textile yarns, lamps and lighting fixtures, furniture and its parts fell by more than 40.0% in March, which in turn dragged down China's overall export growth rate by 2.2, 1.6, 1.3 and 1.2 percentage points from the previous month. However, Xiong Yuan pointed out that there have been signs of replenishment in the United States clothing and other industries, which is expected to boost China's light industry exports.

According to the analysis and outlook of the Minsheng Bank Research Institute, from a long-term perspective, the absolute scale of exports in March ranked second in the same period in history, reflecting the strong resilience of China's exports. In April, May and June last year, the year-on-year growth rate of China's exports was 7.1%, -7.6% and -12.4% respectively, and it is expected that the export growth rate in the second quarter of this year will rebound month by month under a low base.

Exports to Europe and the United States have improved marginally and are expected to pick up in the second quarter

The trend of restructuring of exporting countries has not changed. Xiong Yuan pointed out that exports in March continued to be characterized by January-February, and the United States, the European Union, and ASEAN were still dragging, but the marginal improvement trend continued to strengthen; China's exports to other emerging markets continued to be strong; and exports to Brazil had a marginal weakening trend, which may be related to Brazil's antidumping investigation against China.

In the first quarter, China's imports and exports to the Belt and Road countries reached 4.82 trillion yuan, an increase of 5.5 percent, accounting for 47.4 percent of the total import and export value. Among them, imports and exports to ASEAN were 1.6 trillion yuan, an increase of 6.4%. In the same period, imports and exports to the other nine BRICS countries were 1.49 trillion yuan, an increase of 11.3%, accounting for 14.7%. In addition, imports and exports to the European Union, the United States, South Korea and Japan were 1.27 trillion yuan, 1.07 trillion yuan, 535.48 billion yuan and 518.2 billion yuan respectively, accounting for 33.4% of the total.

According to data from the General Administration of Customs, in the first quarter, China's exports to the Netherlands, Singapore, the Philippines, South Africa, Japan, South Korea and Australia grew at negative year-on-year rates, with -18.5%, -4.2%, -11.5%, -13.1%, -5.7%, -6.1% and -5.9% respectively. In the first quarter, China's traditional markets such as the United States and Japan picked up for the better, with the decline in imports and exports narrowing by 5.9 and 1.2 percentage points year-on-year, and the year-on-year growth rate of China's exports to the United States was 2.1%.

Xiong Yuan analysis, in March, China's exports to the United States and the European Union were -15.9% and -14.9% year-on-year respectively, dragging down the overall growth rate, but the month-on-month was stronger than the seasonal, and the marginal improvement trend continued to strengthen; exports to ASEAN were -6.3% year-on-year, with a significant month-on-month improvement trend; the growth rate of exports to Russia turned from positive to negative, and under the high base of the whole year, it is difficult to have the same bright growth performance as in 2023; exports to other emerging markets (mainly including Central and Western Asia, Eastern Europe and other regions) continued to be strong, with a year-on-year increase of 55.7% However, the base will increase from April, and the growth rate is expected to decline.

The research report of the Research Institute of Minsheng Bank pointed out that in April, May and June last year, the year-on-year growth rate of China's exports was 7.1%, -7.6% and -12.4% respectively, and it is expected that the export growth rate in the second quarter of this year will rebound month by month under a low base.

It is worth noting that at the press conference held by the State Council Information Office on April 12, a reporter asked, and some analysts believe that the fact that producer prices continue to decline compared with the level of 2023 proves that Chinese producers have overcapacity, because it indicates that manufacturers are cutting costs in the process of selling, and at the same time, China's exports in March fell by 7.5% year-on-year.

In this regard, Wang Lingjun, deputy director of the General Administration of Customs, responded, first of all, we do not believe that the decline in producer prices means the so-called overcapacity. The decline in product prices is often related to various factors such as fluctuations in raw material prices, technological updates and iterations, and manufacturers' initiative to make profits. Especially in today's rapid development of science and technology, enterprises through continuous research and innovation, the use of new technologies, new processes, improve product quality, at the same time, effectively reduce production costs, and constantly expand the space to the downstream profits.

For example, Wang Lingjun said that Chinese products are widely welcomed around the world, relying on innovation and quality. These are the results of our corporate efforts, and they are also the rational choices of the majority of users and consumers. He said that on the whole, unfavorable factors such as geopolitical tensions and trade protectionism still exist, but there are also many favorable factors for the current development of foreign trade.

It is expected that China's imports and exports will continue to improve in the second quarter, and basically remain in the growth channel in the first half of the year.

Editor-in-charge: Xiao Zhenyu

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