High Base Will Restrict The Rebound Height Of Future Export Growth

After two consecutive months of growth, exports in September showed negative growth again. The latest import and export data released by the General Administration of Customs shows that China's total import and export value in September was 2.2 trillion yuan, up 3.3% year on year. Among them, the export was 1.15 trillion yuan, down 0.3%; Imports totaled 1.05 trillion yuan, up 7.4%. The unexpected drop in exports led to a sharp 44.7% reduction in the surplus of the month to 93.48 billion yuan.

Although considering the high base in the same period last year, the negative year-on-year growth of exports in September was still lower than the industry had expected, and many institutions expressed "surprise". Many experts interviewed by reporters said that the high base in the same period last year, the emerging pressure of RMB appreciation, and the reduction of working days due to the Mid Autumn Festival were the three main reasons for the lower than expected export performance in September.

"Affected by the large base in the same period last year and other factors, the growth rate fell back to 3.3% in September," Zheng Yuesheng, a spokesman for the General Administration of Customs, said on the 12th. According to customs statistics, China's exports grew 9.9% in September last year, far higher than the average growth rate of last year. Bai Ming, a researcher at the Research Institute of the Ministry of Commerce, also said that in September last year, some customs charges were cancelled, and a lot of backlog of export energy was released, resulting in a high base.

In addition, Bai Ming believes that the appreciation of the RMB has also caused great pressure on enterprises, and the real effective exchange rate has appreciated significantly. At the same time, the currencies of emerging market countries, which are the driving force of China's export growth, have depreciated significantly in September, which has a superimposed effect on China's real exchange rate, increasing the difficulty of exports.

"The political turmoil over the US debt ceiling and the adverse international monetary environment are the main reasons for China's exports falling more than expected in September on a year-on-year basis." Chen Hufei, a researcher at the Bank of Communications Financial Research Center, believes that the political turmoil over the debt ceiling has led to increased risks of uncertainty in US growth and repeated adverse disturbances in the Fed's QE exit expectations, In September, the pressure of unilateral appreciation of RMB against the US dollar reappeared, with a year-on-year appreciation of 3.04% that month, setting the record of the largest monthly increase of RMB against the US dollar since 2013.

Liu Ligang, chief economist of Greater China of ANZ Global Market Department, also said that the strong RMB slowed down the performance of exports, "but it needs to be pointed out that the RMB exchange rate may face a certain risk of weakening in the short term because the trade surplus (September) was significantly lower than expected."

In addition, the reduction of working days due to the Mid Autumn Festival is also a factor. Liu Ligang believed that the export downturn in September was largely affected by the festival factors. "Compared with last year, this year's Mid Autumn Festival falls in the middle of September, which may interrupt the normal construction period to some extent, thus affecting the performance of trade."

However, experts also said that although exports in September showed a negative growth, indicating that the current recovery of foreign trade still faces considerable pressure, exports in the first three quarters still achieved an 8% growth, which is generally better than the second quarter. It is expected that with the arrival of the traditional consumption peak season in Europe and the United States in the fourth quarter, the external demand is expected to further improve. At the same time, due to the base effect of the high growth rate of foreign trade in the fourth quarter of last year, it will still be low and stable.

Zheng Yuesheng said on the 12th that, on the whole, China's import and export showed a low level and stabilized trend. The year-on-year growth rate of China's import and export was 13.5% in the first quarter and 4.3% in the second quarter. In the third quarter, the year-on-year growth rate of China's import and export rebounded to 6%. "The domestic macro-economy has stabilized and improved, the foreign economic environment has improved, and the positive factors to promote the development of foreign trade have begun to increase. Since July this year, the State Council has issued a series of policies and measures to stabilize the growth of foreign trade, and policy benefits are emerging."

The latest survey of enterprises by the customs also shows that the trend of improvement in the fourth quarter will continue. Zheng Yuesheng said that according to the survey data of nearly 2000 enterprises' network at the end of September, China's export managers' index in September this year was 37.8, 1.7 higher than that in August, which was the second consecutive month on month recovery. Among them, the rise of new orders, enterprise information, enterprise operating costs and other indicators indicates that China's exports will stabilize. The survey data also showed that the proportion of enterprises reflecting the year-on-year decrease in the amount of new orders and the year-on-year increase in comprehensive export costs decreased from the previous month, and the proportion of enterprises not optimistic about the export situation in the next 2-3 months also decreased from the previous month. "From the survey of enterprises, it is expected that China's exports will continue to develop steadily in the next two to three months."

The Ministry of Commerce has also said many times recently that the import and export of the country is expected to further stabilize and recover in the next few months of this year, and is confident that through further efforts, it will achieve the expected goal of annual growth in foreign trade import and export.

Chen Hufei predicted that the impact of the US short-term debt dispute on China's foreign trade growth would gradually fade from late October; In addition, the traditional export markets in Europe and the United States will enter the traditional peak season of consumption, production and operation in October, and orders are expected to pick up significantly. However, considering the impact of high export growth in the fourth quarter of last year, a high base will restrict the rebound height of future export growth.