Exports remained resilient and import growth accelerated. In November, Exports (in US dollars) increased by 22.0% year-on-year, higher than market expectations (20.3%), and the two-year average annual growth rate of exports increased from 18.7% in October to 21.2% in November. The further increase in growth rate shows that China’s exports are still resilient. In November, imports (in US dollars) increased by 31.7% year-on-year, significantly higher than the 21.5% expected by the market. The two-year average annual growth rate of imports increased from 12.4% in October to 17.4% in November, and the growth rate of imports accelerated significantly.
Driven by the recovery of global production, China’s exports show resilience. Globally, Most G20 economies (except Mexico) manufacturing PMI has been in the expansion range in the last two months, indicating that production has recovered, which has driven the continuous growth of China’s exports in November. The trend of overseas inventory replenishment will drive the continuous growth of China’s exports. As we said in the macroeconomic outlook for 2022, the developed markets represented by the United States will rebuild inventories, and we expect it to take at least two years The inventory sales ratio close to the historical low can be restored to the trend level. Therefore, we believe that the replenishment trend caused by overseas low inventory pressure will become a sustainable factor to promote China’s exports.
In addition to the export pull, the structural demand gap driven by investment will drive the import growth rate to continue to rise. Under the expectation of sustained export growth, imports will also maintain growth, especially commodities and industrial equipment related to manufacturing production. In addition, in the macroeconomic outlook for 2022, we predict that China’s fixed asset investment will pick up in 2022, especially the infrastructure investment related to green economy and high-end manufacturing, which will drive the import of relevant raw materials and equipment, so the import will continue to grow.
The trade surplus fell slightly from a high level, and the momentum of RMB appreciation against the US dollar will gradually weaken. In November, affected by the rebound in imports, The trade balance fell to US $71.72 billion from the previous monthly record high of US $84.54 billion, lower than market expectations (US $836.0). From January to October this year, the trade surplus continued to expand, which has become the driving force for the appreciation of the RMB. However, with the recovery of infrastructure investment and the continuous growth of imports next year, the trade surplus will narrow. Superimposed on the recovery of the deficit of service trade, the driving force for the appreciation of the RMB against the US dollar will continue to weaken.
With inventory replenishment in developed markets and “resumption of work” in emerging markets, China’s export growth to major destinations increased as a whole. In November, in terms of two-year average annual growth rate, China to South America (33.8%), the United States (24.0%), South Korea (23.4%), the European Union (20.4%), ASEAN (16.0%) maintained a high growth rate of exports, rising by 7.9, 1.4, 4.9, 4.6 and 3.5 percentage points respectively compared with the previous period. Among them, the trend of replenishing inventory in developed markets led to the strengthening of China’s exports to them; due to the easing of the epidemic, the production in emerging markets recovered significantly, and the manufacturing PMI maintained an expansion range from September to November, which became the main reason for the rise of China’s exports to them.
The export growth rate of major consumer goods peaked and the marginal export volume fell. In November, The two-year average annual growth rate of exports of major consumer goods (clothing, footwear, furniture and toys) was 17.1%, an increase of 0.3 percentage points over the previous period (4.8 percentage points) there was a significant decline. In terms of the average annual growth rate of the two years, the exports of footwear and toys rose by 1.3 and 9.8 percentage points respectively compared with the previous period, and the exports of clothing and furniture decreased by 0.9 and 2.7 percentage points respectively compared with the previous period. In November, the export volume of major consumer goods decreased from US $32.42 billion in October to US $31.7 billion, which is in line with us Comments on China’s macro data in October – marginal acceleration of export growth and record high trade surplus in a single month: considering that the export volume of consumer goods in the third quarter of this year is significantly higher than that in the same period in the past, superimposed with the cyclical decline of export in the fourth quarter, the export growth of consumer goods will slow down at the end of this year, but the absolute value of export growth will remain at a high level.
The export growth of high-tech products and electronic products increased. In November, the two-year average annual growth rate of exports of high-tech products was 17.6%, an increase of 4.4 percentage points over the previous period, the highest since May this year. In November, the two-year average annual growth rate of LCD panel was 22.5%, an increase of 4.8 percentage points over the previous period, and the growth rate was the highest in this year. In November, Exports of mobile phones (US $16.54 billion) increased significantly, the highest in this year. In terms of the two-year average annual growth rate, the export of mobile phones ended the three-month negative growth, and the growth rate rebounded to 1.8% in November, an increase of 7.2 percentage points over the previous period. The export growth of electronic products rebounded, probably benefiting from the improvement in the supply of raw materials. In November, the two-year average annual growth rate of the import of integrated circuits was the same as before 9.8% in the period rebounded to 10.3% in November, with a year-on-year growth rate of 2.8%. The improved supply of integrated circuits has benefited from the impact of the “resumption of work” in emerging markets to a certain extent, especially the improvement of the chip packaging and testing industry chain in Southeast Asia.
With the rise of epidemic situation in Europe and the emergence of mutant virus Omicron, there is still room for the export of epidemic prevention materials. In November, the export of epidemic prevention materials increased significantly month on month: the export of textile products used to manufacture masks reached US $13.25 billion, an increase of 6.0% month on month; The export of medical instruments and devices was US $1.91 billion, an increase of 8.7% month on month. In November, after many countries in Europe relaxed epidemic control, the number of newly confirmed cases increased significantly. In addition, the high infectivity of the new variant virus Omicron has also increased the demand for epidemic prevention materials. Therefore, we expect that the export volume of epidemic prevention materials will remain high in the short term.
In November, from the perspective of import structure, the import of bulk commodities and industrial equipment rebounded. In terms of the two-year average annual growth rate, the growth rate of import volume of bulk commodities rebounded as a whole in November, of which, Copper ore (3.8 percentage points), crude oil (4.5 percentage points) and iron ore (8.3 percentage points) rebounded to varying degrees compared with the previous period, while coal (27.5 percentage points) has the largest increase. In November, the two-year average annual growth rate reached 29.9%, and the year-on-year growth rate reached 198.1%. In November, the two-year average annual growth rate of machine tool import remained at a high level of 37.1%, down 1.8 percentage points from the previous period. Considering that China’s coal stock is still low, coupled with the factors of good manufacturing production, China’s demand will continue to drive commodities and exports Import of industrial equipment.
