Customs General Administration: Foreign Trade Data Showed Insufficient Domestic Demand In February.

China's February announcement by the General Administration of Customs

It shows that in February, the total value of China's imports and exports was 1 trillion and 700 billion yuan, an increase of 11.3%.

Among them, exports of 1 trillion and 40 billion yuan, an increase of 48.9%; imports of 666 billion 100 million yuan, down 20.1%.

The two sets of data of one liter and one drop show that the external demand environment is getting warmer overall, but the domestic demand performance is still poor.

Export growth is going up.

Beyond market expectations

In February, exports increased by 48.9% over the same period last year, which is far beyond market expectations.

Earlier, Bloomberg survey averaged 14.8%, and UBS forecast 8.6%.

For the highest growth rate since June 2010, Tang Jianwei, a senior macroeconomic analyst at Bank of communications financial research center and researcher Liu Xuezhi, said that "mainly affected by Cardinal factors and seasonal factors".

Export trade data shrank sharply in the first quarter of last year as a result of the fight against counterfeit trade, exports of US $114 billion 100 million in February last year, and export growth of only -18.13%. The low base makes the export growth rate rise sharply to 48.3% in February this year.

The analysis of historical export data is affected by seasonal factors in the first quarter of the Spring Festival, and the fluctuation of foreign trade data is great.

Except for 2014, the export volume showed a gradual increase trend in February, showing a certain linear rule. If the effect of low base number was eliminated, the export level was normal at February this year.

"From 1 to February this year, exports totaled US $369 billion 411 million, representing a two digit growth rate of 15.1% over the same period last year, and the sharp increase in export growth has exceeded market expectations, indicating that the export situation has obviously recovered."

It is worth noting that from the perspective of trade patterns and export commodity structure, the growth rate of general trade exports is faster than that of processing trade, and the export of major labor-intensive products has increased significantly.

Tang Jianwei and Liu Xuezhi believe that this shows a certain degree of change in the export structure, and the weak recovery of the global economy is driving the demand for labour intensive products to pick up.

From the perspective of export trade, the growth rate of general trade exports in February was as high as 87.4%, which was significantly higher than the export growth rate of 2.7% of incoming processing trade and 12.3% of import processing trade.

From the perspective of export commodity structure, the export growth rate of major labor-intensive products has increased significantly.

The export growth rate of footwear and furniture luminaries reached 99.1%, 120.4%, 99.4%, 89.9%, 111.5% and 150% respectively.

The export growth of high-tech products and mechanical and electrical products is obviously lower than that of labor-intensive products, which are 15.3% and 38.8% respectively.

Import growth continued to decline.

Reflecting domestic demand remains weak

In February, China imported 666 billion 100 million yuan, a decrease of 20.1%, the lowest growth rate since June 2009, with a decrease of -22.6%.

The year-on-year growth rate of imports has increased negatively for 4 consecutive months, showing an increasing trend of decline, leading to a new high trade surplus.

The bank's Financial Research Center believes that the sharp fall in import prices is the main reason for the low growth rate of imports.

Commodity prices continued to fall, and prices of major imported commodities fell sharply.

It is estimated that the import prices of soybeans, iron ores and their concentrates, crude oil and refined oil dropped sharply in February, which were -19.4%, -45.3%, -51.6% and -42.9% respectively. The decline was larger than that in January.

UBS China analysis, from 1 to February, the mainland's imports from the G3 economy increased from 7% in December to 14% over the same period last year, and imports from other regions were also mostly weak: imports from ASEAN countries fell by nearly 19% compared with the same period last year. The total imports from Hongkong, Taiwan and Korea fell 6% (up 7.3% in December last year), and the total import volume from commodity producers in Australia, Brazil, Russia and India dropped from last year's 18.4% to nearly 33%.

Meanwhile, UBS China said that imports and imports of major imports from 1 to February also mostly fell, indicating that domestic demand, especially investment demand, was generally weak.

International commodity prices continued to decline, pulling down the import of most products. However, due to the high base and weak domestic demand, the growth rate of imports of most raw materials and mechanical and electrical products also deteriorated year by year, such as iron ore (from 18% in December to 1% over the same period last year), copper ore (from 12% to 6% over the same period last year), coal (a year-on-year decline from 23% to 45%), crude oil (a year-on-year increase from 13% to 5%), steel (from year to year decline to 13%) and copper (year-on-year decline from 5% to 24%).

Wang Tao, chief economist of UBS China, said that the trend of import and export differentiation, coupled with improved terms of trade, pushed the February trade surplus to a new high of US $61 billion.

She also said that the continued appreciation of the US dollar against major currencies such as the euro and yen and the continuous narrowing of domestic and foreign interest spreads led to continuous outflow of capital. In February, however, the yuan continued to depreciate against the US dollar, but the pace slowed down.

Whether the appreciation of the effective exchange rate of the renminbi relative to a basket of currencies will weaken the export competitiveness and further affect the growth prospects? Wang Tao said, of course, and it is expected that this effect will become more and more obvious.

But for now, Wang Tao said that although China's export competitiveness has been weakened, China's share in the G3 economy and the global trade market is still growing.

In addition, the political pressure from trading partners will still affect the central bank's exchange rate policy, starting from May last year.

In the final analysis, compared with the exchange rate policy, we believe that fiscal support and other policies that are conducive to growth will be more effective in cushioning the economic downturn.

Haitong Securities believes that the trade surplus in February has once again set a new high in history, helping to ease capital outflow.

However, the US dollar index and the domestic interest rate cut cause the depreciation of the RMB, or aggravate the hot money outflow. The high interest rate of money will damage the economy, and therefore, it is necessary to reduce the target again.

Lian Ping, chief economist at the bank, also said that the growth rate of imports has been negative for 4 consecutive months, leading to a record high trade surplus, which has been higher than US $60 billion for two consecutive months. This will bring pressure on RMB appreciation and ease the expectation of devaluation due to interest rate cuts and expand the regulatory space for monetary policy.

Yi Gang, vice president of the central bank, said during the two sessions that the renminbi is currently a strong currency after the US dollar and that the RMB exchange rate can remain basically stable.

The reason is that China's economic growth is still relatively fast, China's trade surplus is still relatively large, and the internationalization of RMB is accelerating.

Haitong Securities said that the central bank's statement, coupled with a rebound in exports and a favorable balance of payments, helped to stabilize exchange rate expectations, and the devaluation of RMB was limited or limited.

Taking into account the sustained economic recovery in the United States and the countdown to raising interest rates, other countries' economies have maintained low growth, but the risk of deflation has intensified. Haitong Securities forecasts that the export growth rate will be 26% in March, with an import growth rate of -15% and a surplus of US $76 billion 400 million.

Wang Yaoji, deputy director of the Securities Research Institute of Fudan University, told reporters that in February, China's exports grew by 48.9% over the same period last year. Even if the base and seasonal factors were affected, it was obviously better than the market expectations. This not only laid a good foundation for the completion of this year's export targets, but also helped to alleviate the downward pressure on the macro-economy.

Wang Yaoji pointed out that we must see that in the context of the rising labor costs, many export enterprises, especially small and medium-sized export enterprises, have a very thin profit and face many difficulties in their operation. Management should support exports through further measures such as further strengthening export rebates and increasing export credit. In particular, enterprises should be encouraged to continuously increase the added value of export products and gradually optimize the structure of export products.