China's exports are expected to continue the slow recovery
China's August export figures came in weaker than anticipated, yet showed a continued upward trend, primarily driven by the gradual recovery of global demand. With external demand still on a slow rebound, China's exports are expected to grow at a moderate pace, with the year-on-year decline gradually narrowing.
According to data released by China Customs on September 11, the total value of China’s foreign trade in August reached $191.7 billion, with exports amounting to $103.7 billion—marking the second consecutive month where exports exceeded $100 billion. Imports totaled $88 billion. After seasonal adjustments, the year-on-year growth rate remained stable, with exports rising by 3.4%, imports by 2.3%, and overall trade by 1%.
Dong Xianan, a senior macro analyst at Industrial Securities, noted that August’s imports fell by 17% year-on-year, while exports dropped by 23.4%. However, after adjusting for seasonality, the growth rate slowed down. Despite this, exports continued to show signs of recovery. Positive economic indicators were reported from key trading partners, including the U.S. and Europe. In the U.S., housing market recovery has begun, and European PMI and UK retail sales in July exceeded expectations. Exports to the U.S. and Taiwan have seen a stabilized year-on-year decline, while exports to France rebounded sharply. This suggests a gradual recovery in consumer demand abroad, with manufacturing sectors in Taiwan and Malaysia also showing signs of improvement.
Prior to July, the textile and garment industries did not see significant improvements in exports. Although August’s overall export numbers were lower than expected, it is anticipated that these sectors will not surpass their growth targets before Christmas.
Chen Yong, a senior macroeconomic analyst at United Securities, highlighted that the August export data was notably worse than expected, mainly due to sluggish external demand. He expects future exports to grow slowly, with the year-on-year decline gradually shrinking as global demand improves. Guo Rong Fund’s Investment Director Yu Rongquan added that although exports remained weak in August, a gradual improvement is expected toward the end of the year as overseas markets begin to restock.
Xing Weiwei, a macroeconomic analyst at CIC Securities, noted that the global economy is showing more optimism, with the U.S. economy turning positive. He expects the export growth rate to turn positive by year-end. Haitong Securities’ senior analysts commented on the article, urging readers to participate in financial forums and enter verification codes for further discussions.
Analyst Li Mingliang pointed out that while import data aligned with expectations, export figures were slightly below forecasts, largely due to weak external demand. Export growth in the first half of 2010 is projected to be between 0% and 5%. From a policy perspective, current export support measures are largely exhausted, and the exchange rate has remained stable, leaving limited room for further policy intervention.
Additionally, August’s import data remained in a historically high range. Dong Xianan noted that after a rapid recovery from December 2008 to May 2009, the seasonally adjusted industrial product imports began to decline slightly but remain in a high-speed zone. The PMI import index in the CFLP manufacturing sector stayed stable. After adjustment, the import-to-annual import ratio in August reached 22.5%. It is expected that the narrowing of imports will not significantly slow down in the coming months.
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