Matters:
In December 2021, China's exports denominated in US dollars fell to 20.9% year-on-year, imports fell to 19.5% year-on-year, and the trade surplus rose to US $94.46 billion.
Ping An View:
In December, the large-scale spread of overseas Omicron epidemic has formed a certain support for China's foreign trade, and exports still show resilience. However, the downward pressure on imports has increased, the trade surplus has reached a new record, and China's economy is characterized by hot foreign demand and cold domestic demand.
In terms of products, in December 2021, the pull of main products on exports decreased or remained unchanged, and the growth rate of labor-intensive products decreased significantly, or it was mainly affected by the continuous recovery of production capacity in Southeast Asian countries. Mechanical and electrical products are still the main force driving exports, but the driving ability has weakened. The export of labor-intensive products such as clothing and toys to China fell sharply to 2.1% from 2.9% in November. Or because the current round of Omicron epidemic has not spread to Southeast Asian countries in a large area, its production capacity continues to recover, squeezing China's export market share of labor-intensive products. Under the influence of overseas epidemic, the average year-on-year pull of epidemic prevention materials on exports was flat at 0.8%.
Looking at different countries, the pull of EU exports to China fell most obviously, while the pull of US exports to China also increased slightly. The pull of EU's total exports to China decreased from 3.2% in November 2021 to 2.4% in December 2021, with the most obvious decline; ASEAN's total exports to China also decreased by 0.2% to 2.4%. At the same time, the pull of us total exports to China further increased, from 3.9% in November 2021 to 4.0% in December, which has warmed up for two consecutive months. Despite the large-scale outbreak of Omicron mutant strain in the United States, the severe rate did not trigger a large-scale tightening of epidemic prevention policy, and the spillover effect of U.S. economic recovery is still strong, which has become an important reason for China's export boom.
In terms of import, crude oil, integrated circuits, coal and lignite, Shenzhen Agricultural Products Group Co.Ltd(000061) , unwrought copper and copper materials still maintain a high pull on the import in December 2021, but the decline of import volume has a marginal drag, reflecting the weak demand in China. In December 2021, among the 17 main imported commodities, the import quantity of 11 decreased year-on-year, further increasing compared with 8 in November.
On the whole, under the continuous effect of the spillover effect of the U.S. economic recovery, the high boom of China's exports has been maintained. However, the further recovery of production capacity in Southeast Asia and other countries began to put some pressure on China's export market share. In December, the export growth rate of labor-intensive products decreased significantly and Vietnam's export growth rate continued to rise, all pointing to this point. In 2022, as the spillover effect of the US economy tends to weaken, the pressure on China's exports to fall still exists. In the case of weak domestic demand, it will put forward higher demands for stable growth, which is also an important consideration of the opinions on cross cycle regulation and further stabilizing Foreign Trade issued by the State Council recently.
In December 2021, exports denominated in US dollars fell slightly from 22.0% to 20.9% year-on-year, slightly better than market expectations; Imports fell from 31.7% to 19.5% year-on-year, lower than market expectations; The trade surplus increased significantly from US $71.72 billion to US $94.46 billion, another record high. From the average year-on-year growth of the two years, the year-on-year growth rates of exports and imports are slowing down, from 21.3% and 17.4% in January 2021 to 19.5% and 13.4% in December respectively. On the whole, the wide spread of overseas epidemics has a certain support for China's foreign trade. The toughness of exports is still strong, but the downward pressure on imports is greater, indicating that China's economy is still characterized by hot external demand and cold domestic demand. The average growth rate of two years is used to analyze the product structure and country structure of exports:
In terms of products, the pull of main products on exports in December 2021 was decreased or flat, and the recovery of production capacity in Southeast Asian countries had an impact on China's export of labor-intensive products. Mechanical and electrical products are still the main force driving exports, but the pulling ability is weakened: in December 2021, the pulling force of mechanical and electrical products on the two-year average growth rate of exports was 12.0%, 0.4 percentage points lower than that of the previous month; The pull of labor-intensive products such as clothing and toys on China's exports fell sharply from 2.9% in January to 2.1%, which may be due to the continued recovery of the production capacity of Southeast Asian countries: in this round of epidemic, the number of infected people in Southeast Asian countries is less than that in Europe and the United States, and the production capacity is less affected, Vietnam's export value, which is similar to China's export product structure, rose sharply to 30.3% year-on-year in December 2021, and the manufacturing PMI of India, the Philippines, Malaysia and other countries also continued to be in the expansion range; Under the influence of overseas epidemic, the average year-on-year pull of epidemic prevention materials on exports remained unchanged at 0.8%; In addition to the above three categories of products, the pull of other products on China's exports has also weakened significantly, from 5.0% in January 2021 to 4.6%.
In terms of countries and regions, the pull of EU's total exports to China fell most significantly, and the pull of US exports to China further increased slightly. The pull of EU's total exports to China decreased from 3.2% in January 2021 to 2.4% in December 2021, with the most obvious decline. In December 2021, the manufacturing PMI in the euro area was 58.0, which fell to the lowest point since March 2021. Moreover, the euro area is the "hardest hit area" of this round of epidemic, and the impact is relatively greater, so the pull on China's imports is weakened. The pull of ASEAN's total exports to China decreased by 0.2 percentage points to 2.4%, and the pull of Japan and South Korea's total exports to China also decreased slightly. At the same time, the US total exports to China increased slightly, from 3.9% in January 2021 to 4.0% in December, which has warmed up for two consecutive months. Despite the large-scale outbreak of Omicron mutant strain in the United States, the severe rate did not trigger a large-scale tightening of epidemic prevention policy, and the spillover effect of U.S. economic recovery is still strong, which has become an important reason for China's export boom. Hong Kong's total exports to the mainland also increased by 0.2% to 2.1% in December 2021, reaching the highest value since June 2021. The growth of entrepot trade through Hong Kong accelerated.
The situation of small foreign trade enterprises is even more difficult. Since 021, the medium and new export order index of small enterprise manufacturing PMI has been lower than that of large and medium-sized enterprises. In December 2021, the medium and new order index of small enterprise manufacturing PMI was only 43.0, significantly lower than 49.1 and 48.1 of large and medium-sized enterprises. Stable foreign trade policies are being introduced one after another. The national regular meeting held on December 23, 2021 pointed out that "at present, foreign trade is facing uncertainty, instability and increasing unbalanced factors". On December 29, 2021, the State Council officially issued the opinions on doing a good job in cross cycle regulation and further stabilizing foreign trade, which put forward 15 policies and measures to promote the stable development of foreign trade from three aspects: tapping the import and export potential, ensuring the stability and smoothness of the supply chain of the foreign trade industry chain and stabilizing the orders of market players, and especially pointed out to support small, medium-sized and micro foreign trade enterprises to maintain orders and stabilize expectations.
In terms of monthly growth rate, crude oil, integrated circuits, coal and lignite, Shenzhen Agricultural Products Group Co.Ltd(000061) , unwrought copper and copper materials still maintained a high pull on imports in December 021. These five products together drove the year-on-year growth of imports by 15.4% in December 2021, and the year-on-year contribution rate to imports reached 79.0%. In terms of the quantity and price of major commodity imports, the decline of import volume has a marginal drag, reflecting the weak demand in China. Among the 17 major imported commodities in December, 2001, the import quantity of 11 decreased year-on-year, further increasing compared with 8 in January. Among them, the import quantity of coal and lignite decreased significantly, and the year-on-year growth rate decreased from 200.5% in January 2021 to - 20.8% in December, or due to the weak demand after the sharp increase of import in January.
