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Jun Ma: Exports Surge;Uunderlying Growth may Have Reached 20% y-y

02-12 00:00 财经网 财经网

Merchandise exports rose 10.6%yoy in January, up from 4.3% in December, and much higher than the consensus forecast of 0.1%. More importantly, the underlying export growth in January -- after adjusting for the data distortion in the same period of last year -- should be much better than what the strong headline figure suggests. We believe that the "true" export growth probably has reached 20% yoy already.

China's trade statistics (especially export growth rates) from December 2012 to April 2013 were seriously exaggerated by speculative capital inflows in the form of disguised trade flow. We estimate that, the average export growth during the period was overstated by about 10ppts. After adjusting for this distortion, the underlying export growth in January this year should be around 20%yoy. In addition, the Chinese New Year is at the end of January this year while it was in February last year. This factor provides a further support for a stronger underlying yoy export growth rate in January this year.

Export growth acceleration was seen in exports to all major markets such as the US (up 10.7% in January vs. 3% in December), to EU (up 18.8% vs. 3.9%), and to Japan (16.1% vs. 5.5%), while exports to Hong Kong fell 18.3% in January (vs. 2.3% growth in December) reflecting the impact of decline in fake exports (which peaked in early 2013) after SAFE tightened regulations in May 2013. By product, high export growth was seen in steel (+37.6%yoy), fertilizer (69.7%), color TV (73.5%), and plastic (13.4%).

January imports rose 10%yoy, up from 8.3%yoy in January. By product, high growth rates in January were seen in liquified petroleum gas (+85.8%yoy), copper (53.2%), airplane (64%), crude oil (11%). We believe that the import figures generally confirm that domestic demand is on the track of a recovery.

We expect the positive trend of export recovery to continue, and export growth should likely rise to 14% for the year as a whole, up from 8% in 2013. We expect export growth to be around 10% in the first 4-5 months of the year, and rising towards 20% in the remainder of this year after the negative base effect (due to fake trade in Jan-Apr of 2013) diminishes. The acceleration in export growth will be driven by improving external demand, especially in the US and Euro area, as well as the deceleration of RMB appreciation in REER terms.

Jun Ma, Chief Economist, Greater China of Deutsche Bank


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