Analysis of trade data in March: foreign demand is better than domestic demand, and the surplus remains high to support the exchange rate

Events

In the first quarter of this year, the total value of China's foreign trade imports and exports was 9.42 trillion yuan, an increase of 10.7%, of which exports were 5.23 trillion yuan, a year-on-year increase of 13.4%; Imports amounted to 4.19 trillion yuan, an increase of 7.5% year-on-year. In US dollars, China's exports in March increased by 14.7% year-on-year; Imports fell by 0.1% year-on-year; The trade surplus was 47.38 billion US dollars.

Commentary

In March, exports fell to 14.7% from 16.3% in February, mainly because the epidemic in Hong Kong, China dragged down entrepot trade. At present, foreign demand is still strong, and the export growth rate is relatively high. Imports in March fell sharply to - 0.1% from 15.5% in February, mainly due to the outbreak of the epidemic in many places in China in March, superimposed by the continuous downturn of the real estate market, which greatly dragged down domestic demand. The trade surplus in March was US $47.4 billion, an increase of US $35.6 billion over the same period last year, and the trade surplus continued to be high. In the first quarter, exports fell to 15.8% year-on-year from 22.9% in the fourth quarter of last year, imports fell to 9.5% from 23.6%, and the high growth rate of foreign trade fell significantly. In the follow-up, the inflationary pressure in the United States continues to increase, the real income of residents continues to decline, the slowdown of U.S. commodity consumption will appear more, and the foreign demand may continue to decline at a high level. In addition, China's epidemic disturbs logistics, some foreign trade orders may flow out, and China's exports may continue to slow down in the follow-up; With the continuous fermentation of China's epidemic and the downturn of the real estate market, the slowdown of domestic demand will be more reflected in imports. The epidemic not only affects consumption and service industry, but also has a significant impact on industry and trade. The downward pressure on the real economy is still large. With the interest rate spread between China and the United States upside down, the market has been worried that the RMB exchange rate will depreciate or the pressure of capital outflow will increase. However, from the current fundamental situation, it is still that external demand is better than domestic demand, resulting in the decline of export growth slower than import growth, and the surplus remains high, which is actually a kind of support for the RMB exchange rate. Because when overseas inflation is much higher than that in China, overseas countries still have the incentive to purchase from China. The impact of the epidemic is still slower than that of imports. Therefore, we believe that the relaxation of monetary policy will not be significantly restricted. Specifically:

1. From the perspective of country / regional trade

In March, exports to developed economies rose to 18.5% from 16.2% in February, and exports to emerging economies rose from 19.6% to 20.7%. Among them, exports to the United States and Japan rebounded significantly. At present, foreign demand is still relatively strong. China's exports maintain a rapid growth rate, and exports to Hong Kong, China fell sharply from 3.5% to - 21.9%, mainly related to the epidemic in Hong Kong, China; In March, imports from developed economies fell to - 9.3% from 7.4% in February, imports from emerging economies fell to 8.5% from 22.7%, and imports from Taiwan fell to 4.6% from 19.8%. In March, China's epidemic situation was obviously fermented, coupled with the disturbance of logistics factors, China's imports slowed down.

2. From the perspective of trade mode

In March, general trade exports rebounded to 20.7% from 20.1% in February. At present, the U.S. job market continues to improve, and residents' commodity consumption is still high, which continues to support general trade exports to remain high; In March, the import of general trade decreased to 1% from 17.5% in February. In March, the epidemic situation in China was relatively serious, and there were obvious outbreaks in many provinces and cities. In addition, the real estate market remained depressed, and the weak domestic demand dragged down the import. In March, the export of processing trade decreased to 4.7% from 5.5% in February, and the import of processing trade decreased from 7.7% to 2.7%. The processing trade continued to decline to a low level. Although the short-term foreign demand was relatively strong, the slowdown trend gradually appeared, especially the superposition of the conflict between Russia and Ukraine and the epidemic situation in China, and the decline or more obvious of Global trade.

3. Import by commodity: the import growth rate of major bulk commodities decreased significantly, and the import growth rate of major bulk commodities decreased in March. Specifically, the import of crude oil in March was 42.711 million tons, down 14% year-on-year (down 4.9% last month), and the import amount of crude oil increased 36% year-on-year (up 43% last month). The import of natural gas was 7.985 million tons, a year-on-year decrease of 8.5% (a decrease of 3.8% last month). The import of copper ore was 2.184 million tons, with a year-on-year increase of 0.6% (an increase of 9.3% in the previous month), and the import amount increased by 15.1% year-on-year, narrowing the increase compared with the previous month; 16.423 million tons of coal and lignite, with a year-on-year increase of - 40% (last month - 14%), and the import amount increased by 6.7% year-on-year; The import of iron ore was 87.283 million tons, a year-on-year increase of - 14.5% (0% in the previous month), and the import amount was - 34% year-on-year; The import of steel was 1011000 tons, a year-on-year decrease of 23.5% (last month - 7.9%) Shenzhen Agricultural Products Group Co.Ltd(000061) import decreased by 1% year-on-year (increased by 10.2% last month), of which soybean import was 6.353 million tons, decreased by 18.2% year-on-year (increased by 4.1% last month). Electromechanical products decreased by 2.7% year-on-year (an increase of 9.1% last month), and the import of high-tech products decreased by 2.5% (an increase of 11% last month). Overall, affected by the epidemic, domestic demand fell in March, and commodity imports showed obvious signs of weakening.

. export by commodity: growth differentiation of main export commodities

In March, the growth rate of various major export commodities was differentiated. Specifically, the exports of lamps, toys, household appliances and furniture among durable goods were 9.9%, 13.8%, 8.5% and 7.1% year-on-year respectively, while the growth rate last month was - 6%, 22%, - 3.6% and 2.2% respectively; The export growth rate of general machinery and equipment rebounded to 27.1% from 13.6% last month. The export growth rate of plastic products in raw materials was 20.8% year-on-year (14.7% last month); The growth rate of steel export fell back to - 34.4% (compared with - 18.8% in the previous month), the export volume of unwrought aluminum and aluminum was 34% (compared with 22.8% in the previous month), and the export amount of steel and aluminum increased by 6.5% and 75.5% respectively year-on-year. In terms of the export of epidemic prevention materials, the export of medical instruments and textiles was 4.9% and 22.2% year-on-year respectively (6% and 11.9% last month). Among traditional labor-intensive products, the export of clothing and luggage increased by 10.5% and 32.6% year-on-year (6.1% and 24.3% respectively last month). On the whole, exports remained relatively high in March.

Risk

The epidemic situation exceeded expectations.

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