Event: on January 14, 2022, the General Administration of Customs released the import and export data of December 2021. Exports (in US dollars) increased by 20.9% year-on-year, the market is expected to increase by 18.2%, and the previous value increased by 22%; Imports (in US dollars) increased by 19.5% year-on-year, the market is expected to increase by 22%, and the previous value increased by 31.7%.
Core view: exports in November 2021 are supported by industrial products and the peak consumption season at the end of the year. In the export data of December, industrial products were still bright, but the growth rate of consumption, high technology, housing economy and other categories generally declined. In the first quarter, it is expected that the export growth rate will begin to decline. First, China’s epidemic has disturbed production and port trade activities, and second, the savings of American consumers have continued to decline and their consumption propensity is not high after the festival. In 2021, the export base is low before and high after, superimposed on the uncertain development of the short-term epidemic in the United States, which suppresses the recovery of employment. It is expected that the export decline rate is slow in the first half of the year. However, in the second half of the year, with the continuous recovery of U.S. employment and the increase of the export base, it is expected that the export growth rate will accelerate and decline.
Exports in December were slightly lower than our expectations and higher than market expectations, showing strong resilience. Exports (a year-on-year increase of 21%) were slightly lower than our expectations (a year-on-year increase of 22%) and higher than market expectations (a year-on-year increase of 18%). The two-year average growth rate of exports in December fell by 2 percentage points to 19% since November, the first time since July last year. The decline of the average growth rate in the two years is related to the high base at the end of 2019. From the month on month perspective, the export performance in December was basically flat in seasonality.
The export growth of industrial products picked up, and the export growth of consumer products fell again. The export showed the characteristics of crossing the peak consumption season at the end of the new year. In our comments in November, we mentioned that the strong export data in November was supported by the expansion of total demand (bright industrial products) and the peak consumption season (the growth rate of toys and LCD panels picked up). According to the data of December, except that the export of industrial products is still bright, the growth rate of automobile export has decreased slightly, but it is still high. The growth rate of other categories, including high technology (integrated circuit, LCD), residential economy (toys, furniture, lamps), consumer goods (clothing, textiles, agricultural products and aquatic products, travel luggage) has decreased.
It is expected that the year-on-year growth rate of exports in the first quarter will begin to decline.
First, a new round of epidemic spread occurred in China in December 2021. In January 2022, Shenzhen started large-scale virus detection for residents and truck drivers. The speed of goods entering and leaving ports such as Shenzhen Yan Tian Port Holdings Co.Ltd(000088) may slow down, and the foreign trade throughput before and after the Spring Festival is expected to be affected to a certain extent. Second, December data have shown a marginal decline in consumption support for Christmas and the new year. With the continuous decline of U.S. household savings, it is expected that the driving force of consumption after the festival will continue to weaken. In combination with the base figure and the trend of the US economy, export growth fell slowly in the first half of the year and accelerated downward in the second half of the year. Firstly, in the four quarters of 2021, the average growth rate of exports in the two years was 13.4%, 14.2%, 16.1% and 19.8% respectively, with the base effect being low before and high after; Secondly, the current outbreak of Omicron in the United States is still at its peak, and the vacancy rate remains high, which will suppress the recovery of the supply chain in the first quarter; However, after entering the summer, with the warmer weather, it is expected that the suppression of the epidemic on employment and supply chain recovery will also weaken, and the dependence on China’s production capacity will also weaken in the second half of the year.
In December, the growth rate of exports to the United States continued to rise, but it is expected that it is difficult for importers to further increase procurement. Exports to the United States performed best in December, with an average growth rate of 4 percentage points to 27% in the two years, while the growth rate to the EU, Japan, South Korea and ASEAN generally fell. However, port congestion in the United States has further intensified recently. In addition to the shortage of truck chassis, it is also related to trade union negotiations. The labor contracts of about 15000 dockers on the west coast of the United States will expire on July 1, and the trade union is playing a difficult game with the Maritime Association. It is expected that the employment of port workers will be difficult to recover quickly and the port congestion will be difficult to alleviate before the negotiation is implemented. Under the background of the continuous extension of unloading time, the continuous and steady recovery of the supply chain between the United States and China, and the continuous decline of the savings rate of American consumers, it is expected that the tendency of importers to continue to increase procurement from China will weaken.
