Main points:
Event: in US dollars, China's exports from January to February increased by 16.3% year-on-year, expected to be 15.5%, and 20.9% in December last year; China's imports increased by 15.5% year-on-year, with an expected 14.7% and 19.5% in December last year; The trade surplus was US $115.95 billion, a year-on-year increase of 19.5%, and US $94.463 billion in December last year.
Core conclusion: Although China's export growth rate from January to February fell slightly compared with that in December last year (compared with the two-year compound growth rate in December last year), it remained above 16% and remained resilient. China's export growth to major emerging economies was mixed, with a sharp rise in export growth to Russia; Exports to major developed countries have increased and decreased, including to the United States and Japan and to the European Union; In terms of products, the export growth rate of Shenzhen Agricultural Products Group Co.Ltd(000061) and automobile related products has increased significantly, and the export growth rate of mechanical and electrical products has declined; From the perspective of reasons, the export resilience is still strong, which is related to the support of external demand, price and epidemic situation. Import growth picked up, mainly due to the increase in the import volume of iron ore and steel driven by domestic demand. In addition, geopolitical factors triggered energy and Shenzhen Agricultural Products Group Co.Ltd(000061) price increases, which increased the import amount of bulk commodities. In the follow-up, China's exports may decline tenaciously. At present, China's foreign trade environment is generally stable. We need to pay close attention to the impact of the conflict between Russia and Ukraine, the US economy and the global epidemic.
Summary of trade data from January to February: export resilience still exists, export growth to Russia has soared, and export growth to major developed countries has increased and decreased. The growth rate of mechanical and electrical products decreased slightly, and the export growth rate of Shenzhen Agricultural Products Group Co.Ltd(000061) , refined oil, automobile and other products increased significantly. In terms of reasons, external demand, price and epidemic situation still support exports. The import growth rate increased, mainly due to the rebound in domestic demand and the increase in the amount of bulk commodity imports due to geographical conflicts and other factors.
1. In terms of exports, in US dollars, exports from January to February increased by 16.3% year-on-year, 20.9% year-on-year in December last year, and the two-year compound growth rate in December last year was 19.5%. Therefore, the export growth rate from January to February this year was lower than that before, but there was still a certain toughness.
(1) the global economic boom has declined slightly. South Korea's exports, which are more consistent with the global economic boom, are still strong. On the whole, foreign demand is still resilient, and the external environment for China's exports is still relatively stable. From January to February, the global manufacturing PMI of JPMorgan fell as a whole compared with last year, that is, 53.2% and 53.6% in January and February respectively, about 1 percentage point lower than 54.3% in December last year; South Korea's export growth rate, which is more consistent with the global economic boom, is still high, with a year-on-year increase of 15.2% and 20.6% respectively from January to February, and a compound growth rate of 15.3% in December last year. Therefore, on the whole, although the global economy has declined slightly, it is still resilient, and the external environment for China's exports is still relatively stable.
(2) by country: the growth rate of China's exports to major emerging economies was mixed, including a sharp rise in the growth rate of China's exports to Russia; Export growth to major developed economies has increased and decreased, including the United States and Japan and the European Union. Compared with the cumulative year-on-year compound growth rate from January to February and the cumulative year-on-year compound growth rate in December last year, among emerging market economies, the growth rate of exports to ASEAN, Brazil and Hong Kong, China decreased; The growth rate of exports to South Korea and India increased, and the growth rate of exports to Russia increased significantly (from January to February this year, the year-on-year growth rate of exports to Russia was 41.5%, 33.8% in December last year, and the compound growth rate of two years in December last year was 16.7%); Among developed economies, the growth rate of exports to the United States and Japan decreased, and the growth rate of exports to the European Union increased. From the perspective of external demand, in the above economies, except the euro zone and South Korea, the manufacturing PMI of most other countries / regions fell. From January to February, the average manufacturing PMI of the United States fell by 0.7 percentage points compared with December last year, and that of Russia fell by 1.4 percentage points.
(3) by product: the export growth rate of mechanical and electrical products decreased, and the export growth rate of Shenzhen Agricultural Products Group Co.Ltd(000061) , refined oil, aluminum, automobile and automobile chassis increased significantly. Comparing the cumulative year-on-year growth rate of commodities from January to February with the cumulative year-on-year compound growth rate of December last year, the varieties with a significant increase in export growth include Shenzhen Agricultural Products Group Co.Ltd(000061) , refined oil, aluminum, automobile and automobile chassis, which increased by 17.8, 17, 45.8 and 53.6 percentage points to 21.4%, 8.9%, 58.8% and 103.5% respectively compared with the cumulative year-on-year compound growth rate of December last year. The varieties with a sharp decline in export growth include plastic products, auto parts, mobile phones and household appliances. In addition, the growth rate of China's export of mechanical and electrical products decreased by 4.4 percentage points to 12.3% compared with the two-year compound growth rate in December last year, which confirms our judgment that the decline in foreign demand this year may drag down the export of mechanical and electrical products.
(4) reasons for strong export resilience: Despite the slight decline in export growth from January to February, the resilience is still strong. The main reasons are as follows: 1) the manufacturing PMI in Europe, America and other developed countries remains at a high level of 55% - 60%, and the consumption and retail sales of durable goods in the United States remain strong, supporting China's export of automobile products; 2) Prices still support some products. We split the unit price pull rate and quantity pull rate of the export amount of key varieties. The price contribution of refined oil, steel, mobile phones and other exports is obvious, which forms a strong support for exports; 3) The repeated epidemic still supports exports. Among them, the cumulative year-on-year export of textile yarn, fabrics and products was 11.8%, higher than the cumulative year-on-year compound growth rate of 9.9% in December last year.
2. In terms of import, in US dollars, the cumulative import from January to February was 15.5% year-on-year, 19.5% year-on-year in December last year, and the two-year compound growth rate in December last year was 13.4%. Considering the base factor, we believe that the import growth rate from January to February this year is stronger than the two-year compound growth rate in December last year, and the import growth rate has increased.
Import growth picked up, mainly due to the increase in the import volume of iron ore and steel driven by domestic demand. In addition, geopolitical factors triggered energy and Shenzhen Agricultural Products Group Co.Ltd(000061) price increases, which increased the import amount of bulk commodities. In February, China's manufacturing PMI new order index rose to 50.7% above the boom and bust line, and the PMI import index rose slightly to 48.6%, reflecting a rebound in domestic demand from January to February. In terms of cumulative year-on-year and cumulative year-on-year compound growth rate in December last year, the growth rate of import amount of crude oil, iron ore, refined oil, steel, fertilizer, copper and other imported products increased, of which crude oil and refined oil increased by 50 and 71.6 percentage points to 43% and 61.9% respectively. In addition, the import volume of copper, automobile, refined oil and fertilizer increased, and the iron ore, its concentrate and steel increased by 7.8 and 9.9 percentage points to 0% and - 7.9%. The growth rate of crude oil import volume decreased by 5.6 percentage points.
The fundamental reasons for the increase in imports are: 1) domestic demand rebounded slightly. The return of new orders of PMI above the boom and bust line and the increase in the growth rate of steel and iron ore indicate that the domestic demand rebounded from January to February, driving the increase of imports; 2) The increase in energy and Shenzhen Agricultural Products Group Co.Ltd(000061) prices caused by geopolitical factors led to an increase in the amount of bulk commodity imports.
From January to February, the export growth rate fell slightly, but the toughness remained. At present, the external environment is relatively stable, but we still need to pay attention to the impact of the conflict between Russia and Ukraine, the US economy and the development of the global epidemic on China's exports.
Although China's export growth rate fell slightly from January to February, it is still resilient, which is in line with the judgment of our previous report. In the follow-up, the external situation of China's exports remains relatively stable: first, if the Russian Ukrainian conflict drives the escalation of sanctions, it will drive the high volatility of global commodity prices, which may drag down the economic recovery of the EU and other countries, but the overall impact on China is limited. Second, at present, the strong economic recovery and hot demand in the United States still support China's exports. Third, the global epidemic is still spreading, the supply chain is difficult to repair quickly, and China's export substitution logic has not been destroyed, which will also be good for exports. 1. The conflict between Russia and Ukraine has a limited impact on China's import and export. The outbreak of the conflict between Russia and Ukraine has triggered severe economic sanctions against Russia in Europe and the United States, which may have a certain impact on the global economy, but the impact on China is expected to be limited. On the one hand, Russia and Ukraine are important global exporters of energy, Shenzhen Agricultural Products Group Co.Ltd(000061) as well as some rare metals and chemical materials. Since the outbreak of the conflict, the global commodity prices have risen, which may have a certain impact on the import of raw materials by other countries. Although China is an important commodity importer in the world, it has already taken a variety of measures to ensure energy and food security, so the impact on China's import cost is controllable; On the other hand, sanctions may drag down the economic development of Russia and Ukraine and EU countries. However, from the perspective of trade relations between China and Russia and Ukraine, the import amount of Russia and Ukraine accounts for about 3% of China's total import, the export amount of Russia and Ukraine accounts for 2% of China's total export, and the trade amount is 2.7% of China's total trade, accounting for a relatively low proportion, so it has little impact on China's export. As an important trade object of China, the EU trade volume with the EU accounts for 14% of China's total trade. However, China's main export products to the EU are commodities with low demand elasticity and are not vulnerable to impact. Therefore, we expect that the conflict between Russia and Ukraine and the mutual escalation of sanctions between Europe, America and Russia may have a limited impact on China's foreign demand.
2. At present, the momentum of economic recovery in the United States is still strong, which has a certain support for China's exports. At present, the US economy is still recovering steadily with strong momentum. In terms of data, the US PMI in February was 57.3, slightly higher than 55.5 in January, and has remained in the expansion range for many consecutive months. In terms of durable goods, the monthly rate of durable goods orders in January turned positive month on month, indicating that the American people have strong demand for relevant goods after the epidemic has been controlled. In terms of retail consumption, retail sales in January increased by 3.8% month on month, much higher than the 2% expected by the market, indicating that the consumption capacity of the American people remained strong. In fact, according to the data of February, the employment demand in the United States is relatively hot, and the employment market in the United States is relatively booming year-on-year. Therefore, at present, the US economy is still resilient, which forms a certain support for China's exports.
3. The epidemic still supports exports. At present, the epidemic is still spreading all over the world. Although the global confirmed cases have fallen to a certain extent compared with the impact of Omicron, tens of millions of people are still confirmed every week, mostly in emerging economies, and the global supply chain is still difficult to repair quickly. As we pointed out in our previous report "Omicron's impact on the global economy and monetary policy", the "dynamic clearing" strategy adopted by China has been more preventive and controlling the spread of the epidemic in China. At present, China has a complete industrial chain system. When the global supply chain repair process is blocked, China's export substitution logic is expected to continue, and the logical chain of epidemic prevention materials + Home Office + export substitution + price support has not been destroyed, so as to support the export to achieve a resilient decline.
Risk tips
The evolution of the epidemic exceeded expectations, the decline of external demand exceeded expectations, and geopolitical conflicts exceeded expectations.
