China's short-term export performance remains robust.

According to the latest data from the General Administration of Customs, in the first eight months of 2024, China's total trade in goods (the same below) was 28.58 trillion yuan, a year-on-year (the same below) increase of 6%. Among them, exports grew by 6.9%, imports grew by 4.7%, and the trade surplus expanded by 13.6%. In US dollar terms, in the first eight months, China's total trade increased by 3.7%. Exports and imports grew by 4.6% and 2.5%, respectively.

From the data, China's export growth trend continues to strengthen. China's exports to major economies continued to rise on a month-on-month basis, with exports to ASEAN, the EU, and the US all maintaining growth in the first eight months. In terms of market entities, China's private enterprises' exports continued to grow at a double-digit rate, and the growth rate of foreign enterprises' imports and exports is also expanding.

Feng Lin, Director of the Research and Development Department of Orient Gold Credit, analyzed that the main driving force behind China's strong export performance is the still relatively strong external demand. Behind the relatively strong external demand, mainly due to the unexpected resilience of the US economy since the beginning of the year, the upward cycle of the global electronics industry, and the expectation of interest rate cuts by the European and American central banks, global trade has recently been in a recovery phase.

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Looking at the trend, the strong export growth momentum in the short term is expected to continue. However, Feng Lin also said that considering that the JP Morgan Global Manufacturing PMI index has been in the contraction range for two consecutive months in August, coupled with the recent US manufacturing PMI index and employment data showing a more obvious downward trend, the signal of slowing external demand has already appeared. Before the end of the year, China's export growth rate may show a trend of decline, weakening the pulling power of external demand on economic growth. "In order to achieve the annual economic growth target, the domestic demand needs to come up in time, and it is expected that macro policies will continue to strengthen in promoting consumption and expanding investment."

The increase in imports and exports to Europe and the United States has expanded.

In August, China's overall export growth rate rose year-on-year, setting a new high for the year.

Yang Chang, Chief Analyst of the Zhongtai Securities Research Institute, told First Financial that in US dollar terms, exports in August this year grew by 8.7% year-on-year, an increase of 1.7 percentage points compared to a 7.0% increase in July. In terms of absolute amount, compared to the previous month, it continued to increase and remained above the 300 billion US dollar level. Due to the relatively stable base of the same month last year, the strong month-on-month trend has promoted the performance of the year-on-year growth rate this month.

Feng Lin said: "In terms of RMB valuation, the year-on-year growth rates of import and export amounts in August were 0 and 8.4%, respectively, and the main reason for the difference in growth rates between the same period in US dollar terms and RMB valuation is the appreciation of the RMB against the US dollar in the past year." She pointed out that this is also the second consecutive month that the import and export growth rates in US dollar terms have been higher than those in RMB valuation, reflecting the recent recovery of the RMB exchange rate on a year-on-year basis.

Data shows that in the first eight months, China's exports to ASEAN, the EU, and the US all maintained growth.Customs data indicates that, in terms of Renminbi, for the first eight months, ASEAN, as China's largest trading partner, saw bilateral trade value reach 4.5 trillion yuan, a growth of 10%, accounting for 15.7% of China's total foreign trade value. Within this, exports to ASEAN increased by 13.1%, while imports from ASEAN grew by 5.7%. As the second-largest trading partner, the trade value between China and the EU amounted to 3.72 trillion yuan, with a growth of 1.1%, constituting 13%. Here, exports to the EU increased by 2.9%, while imports from the EU decreased by 2.1%.

Additionally, the trade value between China and the United States reached 3.15 trillion yuan, with a growth of 4.4%, representing 11%. Within this, exports to the United States grew by 5%, and imports from the United States increased by 2.3%.

Compared to the data from the first seven months, both imports and exports between China and the EU and the United States maintained growth in the first eight months, with the growth rate expanding, increasing by 0.7 and 0.3 percentage points respectively. During the same period, China's exports to the EU and the United States also saw growth rate expansions of 1.4 and 0.9 percentage points respectively.

Specifically, looking at the monthly data in US dollars, Yang Chang analyzed that in August of this year, China's exports to the United States increased by 4.9% year-on-year, with a sequential decline of 3.2 percentage points. The absolute amount continued the upward trend of the year, reaching the highest value since September 2023. However, the stronger base year effect in the previous year led to a suppression of the August year-on-year growth rate.

Exports to the EU increased by 13.4% year-on-year, with the absolute amount growing sequentially, marking the highest value since March 2023. The lower base year effect in the previous year boosted the August year-on-year growth rate. Exports to Japan increased by 0.5% year-on-year, with the absolute amount declining sequentially, but the more significant lower base year effect in the previous year pulled up the August year-on-year growth rate.

The export growth rate of China's automobiles accelerated notably in August.

It is worth noting that the export growth rate of China's automobiles accelerated significantly in August, which is a performance after the EU's imposition of additional tariffs on the import of new energy vehicles from China on July 5th.

Customs data shows that in August, China's automobile exports reached 610,000 units, a sequential increase of 10.9%, marking two consecutive months of high sequential growth. In August, the volume of automobile exports increased by 38.6% year-on-year, with the year-on-year growth rate accelerating by 12.2 percentage points compared to the previous month, also showing two consecutive months of accelerated growth. In terms of export value, the August year-on-year growth rate reached 32.7%, accelerating by 18.9 percentage points compared to the previous month.

In response, Feng Lin believes that this means the overall impact of the EU's tariff increase in July on China's automobile exports is not significant. However, considering that the EU is an important market for China's electric vehicle exports, the later impact still needs continuous attention.

Peking University's Boya Distinguished Professor and Director of the China Economic Research Center, Yao Yang, stated in a public speech in late June this year that China's new energy vehicles have a cost advantage of 50% to 100% over Europe. It is precisely because of such a cost advantage that after the additional tariffs, the first to be eliminated are the less efficient enterprises from other countries, and the share of Chinese enterprises in world trade will only rise and not fall."Against the backdrop of a weak EU economy, insufficient import demand, and escalating China-EU trade frictions, in August, China's export growth to the EU reached double digits, exceeding general expectations," said Feng Lin. This is partly related to the lower base in the same period of the previous year, and it also cannot rule out the possibility of data fluctuations caused by recent China-EU trade frictions, the sustainability of which requires further observation.

Feng Lin also stated that in May, the United States announced the imposition of additional tariffs on Chinese goods to the US, known as the "new three items," valued at $18 billion. Although the scale of goods involved in this round of tariffs is relatively small (accounting for 3.6% of China's exports to the US in 2023), the impact is limited. However, combined with the uncertainty brought by the US elections, it may lead to a "rush to export" effect for other goods to the US in the short term. Therefore, for the foreseeable future, China's export momentum to the US is likely to remain relatively strong.

Increase in foreign-funded enterprises' import and export value expanded

Customs data show that, in RMB terms, for the first eight months, private enterprises' import and export growth was 10.5%, accounting for 55.1% of China's total foreign trade value, an increase of 2.3 percentage points compared to the same period last year. Among them, exports grew by 9.8%, and imports grew by 11.9%.

During the same period, foreign-invested enterprises' import and export growth was 1.5%, accounting for 29.4% of China's total foreign trade value, with the growth rate and proportion increasing by 0.5 and 0.1 percentage points respectively compared to the first seven months; among them, exports grew by 1.8%, and imports grew by 1.1%. State-owned enterprises' import and export declined by 0.1%.

In terms of product structure, mechanical and electrical products account for nearly 60% of the export share, among which, exports of automatic data processing equipment and its components, integrated circuits, automobiles, and mobile phones have increased. For the first eight months, China's mechanical and electrical product exports grew by 8.8%, accounting for 59.1% of China's total export value.

Comparing the data from the first seven months, the growth rate of automobile exports rebounded by 1.5 percentage points, and mobile phone exports turned from negative to positive. The growth rate of labor-intensive products fell by 2.3 percentage points, among which, the growth of clothing, textiles, plastic products, and agricultural products all slightly contracted.

Feng Lin proposed that looking forward to September, with the base in the same period of the previous year being somewhat higher, the strong export growth momentum in the short term is expected to continue. The new export order index in the official manufacturing PMI index for August was 48.7%, an increase of 0.2 percentage points from the previous month, and continued to be above the historical average level. Therefore, the export value in September is expected to maintain a year-on-year positive growth, with an estimated year-on-year growth rate of around 6.0%.

Feng Lin believes that in the first half of this year, the JPMorgan Chase Global Manufacturing PMI index has been continuously in the expansion range. Historical data show that there is a high correlation between China's export trend and this index. Looking at the overall external demand trend, the JPMorgan Chase Global Manufacturing PMI index in August fell to 49.5%, and has been in the contraction range for two consecutive months, indicating that China's export growth rate may experience a trend decline in the later period. A comprehensive judgment suggests that before the end of the year, China's export growth rate may show a trend of downward movement, and the driving force of external demand on economic growth will correspondingly weaken. To achieve the annual economic growth target, it is expected that macro policies will continue to focus on expanding domestic demand.