Core view:
On April 13, the General Administration of Customs released China's first quarter trade data at the press conference of the state information office. Although due to the base effect, the year-on-year growth rate of exports slowed down only moderately in March, the negative month on month growth of exports after seasonal adjustment shows that China's export growth is significantly deteriorating due to the dual impact of supply and demand. The decline in import data in March also showed a drop in Chinese demand - although not as severe as the year-on-year data showed. Common internal and external pressure may prompt the decision of the national Standing Committee on April 13 to continue to increase its weight in "stable growth"; We expect that the central bank may conduct a comprehensive RRR reduction in the near future.
Key investment points:
The dual factors of supply and demand led to the significant deterioration of the month on month growth of exports in March
Although the low base led to a slight decline in the year-on-year growth rate of exports, according to our calculation, the quarterly growth rate of exports that can exclude the influence of the base showed a significant negative growth compared with March, and its trend value was also close to 0, indicating that the export sector is facing a severe situation. It is understood that the impact of the Shenzhen epidemic on supply, the accelerated transfer of orders from China's supply chain to overseas, the regression of excessive orders during the epidemic, the accumulated high inventory, and the impact of the conflict between Russia and Ukraine have all had a negative impact on China's exports. When the high base factor subsides and the supply shock in April is more serious, we expect that the export growth rate denominated in US dollars in April may fall back to single digits.
The decline in import growth reflects weak domestic demand
The sharp year-on-year decline in import growth, especially the negative growth denominated in RMB, has aroused significant concern. We found that the decline of year-on-year growth was largely affected by the high base, but the decline of its month on month growth also reflected the weakening of China's demand.
The national standing committee plans to stabilize growth and reduce reserve requirements in an all-round way
Consistent with our previous prediction, under internal and external pressure, the national Standing Committee proposed "timely use of reserve requirement reduction and other monetary policy tools". We expect that the central bank may conduct a comprehensive RRR reduction in the near future. In addition, the national standing committee requires large banks to reduce the provision rate in an orderly manner, boost consumption in both demand and supply, and expand and accelerate the deployment of export tax rebates. It also has the intention of promoting wide credit and stimulating economic growth. We believe that the concern that the export growth rate may decline rapidly in the future or the important factor of the export boosting measures launched by the national Standing Committee.
Risk warning: the export is inconsistent with the expectation; Global epidemic deterioration; Sino US relations deteriorated more than expected
