20240611-招银国际-Exports_beat_to_power_economic_recovery_7页_971kb

Export Growth Drives Economic Recovery

The report highlights the resilience of China's export sector in May 2024, with exports growing by 7.6% year-on-year (YoY). This improvement is attributed to several factors: a high-low base effect from the previous year, competitive pricing, and increased demand in developing markets. Key contributors to export growth include shipments of ships, electric vehicles (EVs), home appliances, furniture, and integrated circuits, alongside strong performance in exports to major partners like ASEAN, the EU, and the US. The front-loading effect related to potential upcoming tariff increases further supported recent export gains.

Key Export Drivers

• Emerging Markets: Orders from developing nations played a crucial role in sustaining export growth.
• Technological Products: Cellphones, computers, integrated circuits (ICs), and auto vehicles showed consistent double-digit growth, although the auto industry saw a slight moderation from April. The electronics industry continued its robust performance.
• EV Leadership: China strengthened its position as a global leader in EV exports, particularly to markets like Brazil.

Challenges and Future Outlook

While export numbers look promising, China's imports remain under pressure due to reduced grain, copper ore, crude oil, machine tools, and aircraft imports. Rising input costs and global demand conditions are key factors influencing this trend.

Looking forward, the report maintains a positive outlook on exports, expecting continued solid growth in 2024 fueled by low base effects, rising demand abroad, and price advantages. However, increased tariff threats from the EU and US introduce some uncertainty. The report anticipates stronger export performance despite deviations in tariff-related dynamics. A potential mild rebound of the RMB in 2024-2025 is also predicted as China's economic performance and prices stabilize while the US economy and inflation cool.

The overall message underscores the expanding role of the export sector in supporting China's moderate economic recovery.