China’s exports edged up for the first time in seven months in November, increasing by 0.5% from a year earlier to USD291.9 billion. The reading was better than the fall of 6.4% in October, and was above the forecast by Chinese financial data provider Wind, which projected an increase of 0.4%. The year-on-year jump – the first such increase since May – and the level of export volumes hitting a fresh high was supported by exporters reducing prices, according to analysts at Capital Economics. “We doubt this robustness will persist, however, as exporters won't be able to continue cutting prices for much longer,” they said. After accounting for price effects and seasonality, Capital Economics estimated that export volumes rose by 1% last month, reaching a record high. “China’s export growth turned positive in November. The improvement in exports is broadly in line with market expectation,” said Zhang Zhiwei, President and Chief Economist at Pinpoint Asset Management. But Ding Shuang, Chief Greater China Economist at Standard Chartered Bank, said the modest improvement in China’s exports was largely due to the low base of comparison as the overall trade situation has deteriorated over the past two years. “China’s overall trade is still sluggish,” Ding said. “Without the support of price cuts, exports are unlikely to defy the slowdown in growth among China's major trading partners, which we expect to continue in the first half of next year.” China’s exports to the United States grew by 7.35% year-on-year, rising for the first time since July last year, having fallen by 8.19% in October. China’s exports to the European Union fell by 14.51%, down further from a fall of 12.56% in October, while China’s exports to the Association of Southeast Asian Nations (ASEAN) also dropped by 7.07% from a year ago, although the fall was slightly narrower than the 15.1% decline in October.
China’s imports fell by 0.6% in November to USD223.5 billion, a pronounced drop compared to October’s 3% growth, and fell short of Wind’s growth prediction of 3.5%. “Import volumes declined after hitting a record high in October, but they are likely to remain strong in the near term as fiscal support boosts commodity demand,” said analysts at Capital Economics. Imports, though, are likely to hold up better than exports in the near term, as an increase in infrastructure spending should support demand for metals. “While export growth improved, it is unclear if exports can contribute as a growth pillar into next year. The European and U.S. economies are cooling,” said Zhang at Pinpoint Asset Management. “China still needs to depend on domestic demand as the main driver for growth in 2024. The fiscal policy stance is the focus for the market. “There is a consensus that fiscal policy will turn expansionary next year. How aggressive the policy will be is unclear at this stage.” The Central Economic Work Conference (CEWC) to be held this week may shed some light on China's economic and trade policies for next year. China’s total trade surplus in November stood at USD68.3 billion, up from USD56.5 billion in October.
In yuan terms, total foreign trade in November reached CNY3.7 trillion, increasing 1.2%, with exports rising 1.7% and imports up 0.6%, the General Administration of Customs (GAC) said. Data also point to lingering challenges for China's overall trade. In the first 11 months of 2023, total imports and exports remained flat from last year, with exports up 0.3% and imports falling 0.5%. There were also some highlights that suggest structural improvements in China's foreign trade. Notably, imports and exports with countries participating in the Belt and Road Initiative (BRI) expanded by 2.6% in the January-November period, with exports to those countries jumping 6.9%. Also significantly, imports and exports of private enterprises increased by 6.1%, accounting for 53.3% of China's total imports and exports. Exports of smartphones grew 3.3%, while auto exports jumped 79.6%.
The EU remained the second-largest trade partner of China in the first 11 months of this year. Bilateral trade dropped 2.2% year-on-year to CNY5.03 trillion in the first 11 months this year. China's trade surplus with the EU stood at CNY1.41 trillion, down 16.7% year-on-year. While exports to the EU fell 5.8% year-on-year to CNY3.22 trillion, China's imports from the bloc grew by 5% to CNY1.81 trillion, according to the GAC.
This overview is based on reports by the South China Morning Post, the Global Times and the China Daily.
