Mixed Signals: What Is the Outlook for China's Exports in the Second Half?(AI Translation)
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文｜财新周刊 李蓉茜 冯奕铭 余聪
By Caixin Weekly's Li Rongxi, Feng Yiming, Yu Cong
地缘政治冲突导致红海航路阻断，美国、欧洲强势祭出“301关税”“反补贴调查”等打压手段，诸多扰动因素给始自2023年11月的这轮外贸回暖趋势蒙上了阴影。
Geopolitical conflicts have led to the blockage of Red Sea routes. The United States and Europe have strongly resorted to measures such as "Section 301 tariffs" and "anti-subsidy investigations" to exert pressure. Numerous disruptive factors have cast a shadow over the revival in foreign trade that began in November 2023.
2023年，中国商品出口额3.38万亿美元，同比下降4.6%，年内月度同比负增长持续了六个月直到11月转正。除了2024年3月因同比基数较高造成的负增长（以美元计下降7.5%），2023年11月至2024年5月，中国出口整体处于回暖区间，同比增长最低0.7%、最高8.1%。
In 2023, China's merchandise export value reached $3.38 trillion, marking a 4.6% year-on-year decline. The monthly year-on-year negative growth persisted for six months until it turned positive in November. Aside from the decline in March 2024 due to a high comparison base (a 7.5% decrease in USD terms), from November 2023 to May 2024, China's exports generally experienced a recovery phase, with year-on-year growth rates ranging from a minimum of 0.7% to a maximum of 8.1%.
6月7日，海关总署发布最新数据，5月中国出口总值3023.5亿美元，同比增长7.6%，环比增长3.5%，前五个月累计同比增长2.7%，显示5月的出口景气度有显著抬升。
On June 7, the General Administration of Customs released the latest data showing that China's total exports in May reached $302.35 billion, marking a year-on-year increase of 7.6% and a month-on-month rise of 3.5%. Cumulatively, the export value for the first five months of the year grew by 2.7% compared to the same period last year, indicating a significant improvement in export activity in May.
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- Geopolitical conflicts have disrupted the Red Sea routes, causing major shipping delays and rerouting, significantly increasing freight rates globally.
- Despite a challenging environment with tariffs and trade tensions, China's merchandise exports saw a recovery phase from November 2023 to May 2024, though trends show increased export volumes but decreased prices.
- China's export landscape to major partners like ASEAN, the EU, and the US is evolving, with ASEAN gaining prominence and significant export growth seen in high-tech and electromechanical products.
Geopolitical conflicts have disrupted Red Sea shipping routes, causing global trade disruptions. The U.S. and Europe have imposed tariffs and anti-subsidy investigations, impacting foreign trade recovery since November 2023.[para. 1]
In 2023, China’s merchandise exports totaled $3.38 trillion, a 4.6% year-on-year decline, with negative growth for six months until it turned positive in November. Between November 2023 and May 2024, export growth varied from 0.7% to 8.1% year-on-year. In May, exports reached $302.35 billion, up 7.6% year-on-year.[para. 2]
ASEAN, the EU, and the U.S. were China’s top trading partners, accounting for 16.8%, 14.6%, and 14.0% of total exports, respectively. Exports to ASEAN and Brazil drove growth in May, with a 27.4% increase to Vietnam and 48.9% to Brazil, while exports to the EU and Japan had negative contributions.[para. 3]
High-tech products positively contributed to export growth, while labor-intensive products declined. U.S. demand showed signs of improvement, with a 3.6% year-on-year increase in May despite an overall decline in the first four months.[para. 4][para. 5]
China's Consumer Confidence Index had declined for three months starting in February 2024. Shipping disruptions from geopolitical conflicts led to container rerouting via the Cape of Good Hope, causing freight rates on major routes to soar. By May, tight shipping capacity persisted, with the Shanghai Containerized Freight Index hitting 3044.77 points, up 56.90% monthly.[para. 6][para. 7]
Tariffs have forced accelerated exports, with Brazil reinstating taxes on new energy vehicles, Mexico imposing import tariffs on various goods, and the U.S. planning new tariffs under Section 301. These measures further complicated trade in 2024, and despite aggressive shipping schedules, the peak season shifted from mid-June to mid-April, altering traditional cycles.[para. 8][para. 9]
China's export resilience remains strong, indicated by surveys from key enterprises, despite challenges from geopolitical tensions and trade protectionism. Surveys revealed over three-quarters of businesses expected stable or increased trade volumes for 2024.[para. 10][para. 11]
The "new three" export categories (photovoltaics, lithium batteries, and electric vehicles) initially drove growth in 2023 but have since cooled in demand. Exports of photovoltaic materials to Europe saw a 50.88% year-on-year decline.[para. 12]
U.S. retailers replenishing inventories boosted consumer goods exports, with container shipments increasing 16% year-over-year in the first four months of 2024. Despite higher volumes, export values for consumer goods were lower due to falling prices.[para. 13][para. 14][para. 15]
China’s logistics sector predicts that the traditional peak shipping season from June to August may not meet usual expectations due to geopolitical and trade policy uncertainties. Despite increased export volumes, low prices persisted, causing revenue challenges.[para. 16][para. 17][para. 18]
Latin America, especially Brazil and Mexico, saw significant increases in Chinese automobile exports. Tariff changes have spurred exports before higher rates take effect in July 2024. Despite new tariff policies, local production plans are anticipated to support sustained export growth.[para. 19][para. 20]
Freight rates for China to South America surged, with logistics companies warning of ongoing tight shipping capacity. Blockchain technology and digital freight platforms noted a reduction in capacity and a need for advance booking to avoid delays amidst high demand.[para. 21][para. 22]
In summary, China's foreign trade recovery faces complex challenges, such as geopolitical conflicts and evolving trade policies that disrupt traditional shipping and export cycles. However, sustained export resilience and adaptive strategies continue to drive growth despite these hurdles.
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