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"Export Delays: September 2024 Foreign Trade Data Review"
Core Viewpoints
Item: In US dollar terms, China's exports in September 2024 grew by 2.4% year-on-year, down from 8.7% in the previous month; imports grew by 0.3% year-on-year, a decrease of 0.2 percentage points from the previous month; the trade surplus was $81.71 billion, an increase of 8.8% year-on-year.
By country, in September, China's exports to Russia, the European Union, and Africa saw further strengthening, while the export pull to ASEAN, Latin America, India, Hong Kong, Taiwan, and South Korea fell significantly. The General Administration of Customs noted that the decline in export growth in September was mainly due to short-term incidental factors, including: two typhoons in the Yangtze River Delta region causing a delay in exports; and adjustments to the shipping and logistics rhythm of enterprises due to global shipping disruptions and container shortages. Considering that China has rail transport connections with Russia, the European Union, and Africa, which are less affected by maritime conditions, this may be the main reason why China's exports to these regions maintained good growth in September. In contrast, China's exports to Latin America, Hong Kong and Taiwan, and South Korea may have been more affected by maritime conditions.
This is consistent with the observed decline in the year-on-year growth rate of port container throughput in September from high-frequency data. Given the significant rebound in the growth rate of this indicator since October, there is no need to be overly concerned about the slowdown in September's export growth. Instead, more attention should be paid to the risks to China's foreign trade policy derived from the US presidential election.
In terms of products, in September, the pull of China's exports of steel, ships, and automobiles was enhanced. In addition to their prominent price advantages, steel and automobiles may also include factors of pre-tariff export rush. Conversely, the pull of China's exports of high-tech products such as integrated circuits, automatic data processing equipment, mobile phones, as well as labor-intensive products such as plastic products, furniture, and clothing, fell significantly in September.
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Regarding imports, the main factors affecting China's imports in September were, on the one hand, a significant decline in the pull of crude oil and iron ore imports. The decline in iron ore pull was affected by both weak prices and reduced demand, related to the sluggishness of the domestic black industry chain, while crude oil imports were mainly dragged down by weak prices. On the other hand, the pull of agricultural product imports was significantly enhanced, with the decline in international agricultural product prices being an important context for import growth, and both quantity and price factors improved in September. The interplay of these two factors kept the overall import growth stable.
Risk Warning: The implementation of stable growth policies is less than expected, geopolitical conflicts escalate, and the degree of overseas economic recession exceeds expectations.
In US dollar terms, China's exports in September 2024 were 2.4% year-on-year, down from 8.7% in the previous month; imports were 0.3% year-on-year, down 0.2 percentage points from the previous month; the trade surplus was $81.71 billion, an increase of 8.8% year-on-year. From January to September, China's cumulative exports were 4.3% year-on-year, and cumulative imports were 2.2% year-on-year, both down 0.3 percentage points from the previous month.
By country, in September, China's exports to Russia, the European Union, and Africa saw further strengthening, while the export pull to ASEAN, Latin America, India, Hong Kong, Taiwan, and South Korea fell significantly. The General Administration of Customs noted that the decline in export growth in September was mainly due to short-term incidental factors, including: two typhoons in the Yangtze River Delta region causing a delay in exports; and adjustments to the shipping and logistics rhythm of enterprises due to global shipping disruptions and container shortages. Considering that China has rail transport connections with Russia, the European Union, and Africa, which are less affected by maritime conditions, this may be the main reason why China's exports to these regions maintained good growth in September. In contrast, China's exports to Latin America, Hong Kong and Taiwan, and South Korea may have been more affected by maritime conditions.
This is consistent with the observed decline in the year-on-year growth rate of port container throughput in September from high-frequency data. Given the significant rebound in the growth rate of this indicator since October, there is no need to be overly concerned about the slowdown in September's export growth. Instead, more attention should be paid to the risks to China's foreign trade policy derived from the US presidential election.Looking at the products, in September, the export of steel, ships, and automobiles from China saw a strengthened boost. Besides the prominent export price advantage, steel and automobiles might also include the factor of rushing exports before the imposition of additional tariffs. On October 4th, the European Union voted to pass a proposal to impose additional tariffs on Chinese electric vehicles, with the tax rate increasing from 10% to a range of 7.8% to 35.3%, making the final export tariff on Chinese cars to the EU 17.8% to 45.3%. On September 27th, the United States Trade Representative (USTR) announced a 25% tariff on steel imports from China, and an order from the Indian Ministry of Finance on September 10th indicated that India would impose tariffs ranging from 12% to 30% on certain steel products imported from China and Vietnam. Conversely, in September, the export of high-tech products such as integrated circuits, automatic data processing equipment, mobile phones, and labor-intensive products like plastic products, furniture, and clothing saw a more significant decline in China's export momentum.
In terms of imports, the main factors affecting China's imports in September were, on one hand, a noticeable decrease in the momentum of crude oil and iron ore imports. From January to September, the cumulative year-on-year growth of China's imported crude oil was -2.8%, which was a slight improvement compared to the previous month; however, the cumulative year-on-year growth of imported iron ore and its concentrates was 4.9%, showing a decline compared to the previous month. This indicates that the decline in iron ore import momentum was influenced by both weakening prices and reduced demand, related to the sluggishness of the domestic black industry chain, while crude oil imports were mainly dragged down by weakening prices. On the other hand, the momentum of agricultural product imports significantly strengthened. From January to September, the quantity of imported soybeans and grain grew by 8.1% and 7.8% year-on-year, respectively, both showing a significant increase compared to the previous month. The value of imported soybeans and grain fell by -9.7% and -10.5%, respectively, both showing a narrowing of the decline compared to the previous month. The decline in international agricultural product prices is an important context for the growth in imports, and in September, both quantity and price factors improved. The interplay of these two factors kept the overall import growth relatively stable.
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