Zhitong Financial APP learned that CITIC Securities issued a research report saying that the recent weakening of external demand, typhoon extreme weather and the increase in the base of the same period last year made the export growth rate in September decrease by 6.3 percentage points compared with the previous value, and the export chain prosperity margin weakened. From the perspective of export structure, exports to the EU and Latin America have fallen more, and machinery and transportation equipment, automobile industry chain, and semiconductor industry chain have made a greater positive contribution to export growth. In terms of imports, the growth rate of imports in September fell from the previous month, mainly because the domestic manufacturing industry is still at a low level. Looking forward, the continuous replenishment of overseas warehouses will still support the export fundamentals in the short term, but the subsequent weakening of the global manufacturing boom margin may make the slope of overseas replenishment continue to slow down, and the base of export growth at the end of the year will rise, which will constitute a certain drag on the future export growth.
In September 2024, China's exports (in US dollars) increased by 2.4% year-on-year (Wind consensus expectation of 5.9%), and in August 2024, it increased by 8.7% year-on-year. The value of imports (in US dollars) rose 0.3% year-on-year in September (Wind consensus forecast for 1.2%), and 0.5% year-on-year in August; The trade balance in September was $81.71 billion, up 8.8% year-on-year. In this regard, CITIC Securities commented as follows.
The recent weakening of the margin of external demand, typhoon extreme weather and the rise in the base of the same period last year have caused the export growth rate to decline in September, and the export growth rate to the European Union and Latin America has fallen more, and the machinery and transportation equipment, automobile industry chain, and semiconductor industry chain have made a greater positive contribution to the export growth rate.
China's export growth rate in September 2024 was 2.4%, down 6.3 percentage points from the growth rate in August, and the export chain boom weakened. The year-on-year decline in export growth in September was mainly related to the recent weakening of external demand, typhoon extreme weather and the increase in the base of the same period last year. In September, the global manufacturing PMI index fell month-on-month from August, recording 48.8%, which was below the boom and bust line for three consecutive months. In addition, two typhoons made landfall in the Yangtze River Delta region in September, and according to historical experience, the impact of typhoons on exports lasted for a long time, and the fleet schedule was often delayed after the typhoon, and exports were delayed.
In terms of sub-regions, in September 2024, the growth rate of China's exports to major export destinations mostly fell from the previous month. In September, the growth rates of China's exports to United States, the European Union, ASEAN, Latin America, Africa and Russia were 2.2%, 1.3%, 5.5%, 3.4%, -0.7% and 16.6% respectively, with changes of -2.8, -12.1, -3.5, -16.3, -5.2 and 6.2 percentage points respectively from the previous month. CITIC Securities estimates that exports to ASEAN and Russia contributed significantly to the mainland's export growth in September this year, with pull rates reaching 0.8 and 0.5 percentage points respectively.
From the perspective of export commodity structure, in September 2024, the export of ships, automobiles, including chassis, integrated circuits, household appliances, automatic data processing equipment and parts, and general machinery and equipment grew rapidly, with growth rates of 113.8%, 25.7%, 6.3%, 4.5%, 4.2%, and 2.9% respectively. According to the calculation of CITIC Securities, in September, machinery and transportation equipment, automobile industry chain, and semiconductor industry chain were 0.9, 0.7, and 0.5 percentage points respectively to pull exports. The overall drag of labor-intensive products on exports increased compared with the previous month, and the year-on-year growth rate of exports of clothing, toys, furniture, shoes and bags fell from the previous value.
The growth rate of imports in September fell slightly from the previous month, mainly because the domestic manufacturing boom was still at a low level in September.
China's import growth rate in September 2024 was 0.3%, down 0.2 percentage points from the previous value. The previously released domestic manufacturing purchasing managers' index recorded 49.8% in September, 0.4 percentage points lower than the seasonal average of the past five years, indicating that the domestic manufacturing industry is still at a low level. From the perspective of the structure of imported commodities, the most eye-catching performance is the semiconductor industry chain. In September 2024, China's imports of automatic data processing equipment and its parts increased by 72.5% year-on-year, and the growth rate remained in a high range. In addition, the monthly growth rate of imports of automatic data processing equipment and its parts has remained above double digits since October 2023. In September 2024, China's integrated circuit imports increased by 11.0% year-on-year, and the growth rate was also significantly higher than the overall import growth rate. In addition to the semiconductor industry chain, the amount and quantity of upstream raw material imports in September also maintained a rapid growth rate. In terms of import value, imports of natural gas, copper ore and coal increased by 23.7%, 19.7% and 8.9% respectively in September; In terms of the number of imports, imports of natural gas, copper ore and coal increased by 18.2%, 8.7% and 12.9% respectively in September.
Looking forward, the continuous replenishment of overseas warehouses will still support the export fundamentals in the short term, but the subsequent weakening of the global manufacturing boom margin may make the slope of overseas replenishment continue to slow down, and the base at the end of the year will rise, which will constitute a certain drag on the future export growth.
In July this year, the overall inventory growth rate of United States recorded 2.5% year-on-year, an increase of 0.5 percentage points from the previous value. According to CITIC Securities estimates, as of July this year, in addition to professional and commercial equipment and supplies, computers and computer peripherals and software, electrical and electronic products, hardware, plumbing and heating equipment and supplies, paper and paper products, clothing and clothing fabrics, petroleum and petroleum products, food and related products, beer, wine and distilled spirits and other industries, the furniture and home furnishings industry in United States may also begin to enter the replenishment stage in July. However, the recent marginal decline in the manufacturing boom in the United States and Europe may make the subsequent global replenishment slope marginal slowdown. Among them, the ISM manufacturing PMI index in United States recorded 47.2% in September, the same as the previous value but lower than the market expectation of 47.5%, and the manufacturing PMI index in the euro area recorded 45.0% in September, down 0.8 percentage points from the previous value. In addition, the base of mainland exports will continue to rise in the next few months, and the export growth rate in November and December last year will gradually rise to above zero, which will also bring some downward pressure to the export growth rate at the end of this year.
Bond Market Strategy:
In September, mainland exports were disturbed by occasional factors such as typhoons and fell short of market expectations. For the bond market, the recent market is mainly affected by the roller coaster of emotions driven by several meetings before and after the holiday and market volatility, as well as the seesaw effect of stocks and bonds. In the fundamental dimension, in the case of weakening foreign trade data, the short-term focus is on the marginal changes in domestic demand, including financial data and the quality of economic data in the third quarter. Considering that the central bank's monetary easing orientation is clear and the actual effect of the policy combination on the fundamentals remains to be seen, the bond market after the correction may still have allocation opportunities.
Risk factors:
The recovery of external demand is less than expected; deterioration of geopolitical risks, etc.
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