Moderate and stable growth of China’s foreign trade may become a “new normal”

The latest data released by the General Administration of Customs shows that exports in November were lower than expected year-on-year, and the import growth rate once again slipped into the negative range. Industry insiders said that the performance of foreign trade this year is tepid, and exports will hardly play the main force in “stabilizing growth” this year, but they will not play the role of “lagging back”.
In November, China’s total import and export value was US$368.85 billion, a year-on-year decrease of 0.5%. Among them, exports amounted to US$211.66 billion, a year-on-year increase of 4.7%, which was lower than the 8% previously expected by the market.
Liu Dongliang, a senior analyst at China Merchants Bank, said that November’s export data dropped significantly compared with October, both because of the base and the exchange rate. Since July, the real effective exchange rate of the RMB has risen sharply, and its cumulative effect is having a substantial impact on exports.
The latest report released by Alibaba’s Yidatong platform shows that recently the new order volume index and operating rate index of export companies have declined month-on-month, the foreign trade diffusion prosperity index has also declined slightly, and the raw material and energy cost index has also declined. However, the positive impact of the peak season for foreign trade procurement continues to exist, and the operating conditions of small and medium-sized foreign trade enterprises are still booming.
Chang Jian, chief China economist at Barclays, believes that although export growth has slowed down, China’s export data is still better than that of neighboring economies, so it is not appropriate to be overly pessimistic. In terms of export commodities, the export growth rate of footwear, furniture and plastic products has slowed down, while the export growth rate of clothing, mechanical and electrical products and high-tech products has improved.
Bai Ming, deputy director of the International Market Research Department of the Research Institute of the Ministry of Commerce, believes that under the current background of unstable international markets, continued pressure for RMB appreciation, and increasing pressure from external competition, it will be difficult to reproduce the days of rapid growth of China’s foreign trade in the past. However, some time ago The decline in foreign trade has also been reversed. At present, it is difficult for foreign trade to play the main force in “stabilizing growth” this year, but it will not play the role of “lagging back”.
It is worth noting that the import volume in November was 157.19 billion US dollars, a year-on-year decrease of 6.7%, and the growth rate once again slipped into the negative range. Customs data shows that among imported goods, the import volume of major bulk commodities increased, and the average import price generally fell.
Industry insiders believe that the main factors for unsatisfactory imports include the overall economic slowdown, falling international commodity prices, reduced use of foreign investment in the manufacturing industry, and sluggish processing trade scale business. Moreover, import growth has turned negative, which may be a drag on future export performance.
Due to sluggish imports, the trade surplus in November reached US$54.47 billion, a year-on-year expansion of 61.4%, putting the current RMB exchange rate in a dilemma.
Overall, the foreign trade data in the first 11 months of this year were tepid, with the total import and export value increasing by 2.2% year-on-year, exports increasing by 4.4%, and imports decreasing by 0.4%.
The “Report on China’s Foreign Trade Situation (Autumn 2014)” released by the Ministry of Commerce predicts that the international environment facing China’s foreign trade development will improve slightly next year, but the recovery will be limited, and risks and uncertainties will be more prominent.
Bai Ming predicts that there will be considerable pressure to “stabilize foreign trade” next year. However, as the promotion and replication of the Shanghai Free Trade Zone accelerates, the Belt and Road construction accelerates, and the implementation of the free trade zone strategy continues to strengthen, confidence in the development of foreign trade next year will also increase. Moderate and stable growth of foreign trade will become the “new normal”.
A report released by Anbang Consulting shows that from the perspective of the “troika” driving economic growth, consumption growth will still be difficult to significantly improve in the short term. In terms of exports, the prospects for economic recovery in the Eurozone are still bleak, Japan’s economy is in recession, and China’s The export situation is hardly optimistic.