China: Why Imports Outperformed Exports

Published 05/08/2019, 04:19 AM
Updated 06/16/2021, 07:30 AM
CL
-

Exports contracted 2.7% year-on-year in April while imports enjoyed a rise of 4.0% YoY. These numbers reflect the negative outlook for smart devices and automobile sales globally, and at the same show that China is importing more crude oil for domestic use

Weak exports reflect structural changes in smart devices and automobiles

Exports shrank by 2.7% YoY in April. Two sectors, which are undergoing structural change, continued to see exports contract:

  • Smart devices fell 19% year-to-date. This export item alone contributed more than 5% of total imports.
  • Automobiles and related parts fell 1.2% YTD and 3.5% YTD, respectively.

Imports were supported by crude oil

In contrast, imports grew 4% YoY. But don't get too excited; the details show that most items actually contracted on a year-on-year basis. Crude oil imports are an exception, growing 16% YoY, probably to fulfil the strategic needs of the government.

The structural changes in smart devices and automobiles are also evident in imports. Both smart device-related and automobile-related imports experienced negative growth year-to-date. Integrated circuits shrank 6.5% YTD and automobiles fell 9.3% YTD.

Escalating trade war will make the trade situation worse

We are not particularly optimistic on China's export and import data in coming months.

  • First, the escalation of the trade war means it is likely there will be more tariffs imposed on China's exports, and China's retaliation means more expensive imported goods from the U.S. So both China's exports and imports will be hit.
  • Second, the structural change in smart devices and automobiles will continue. Consumers have been delaying purchases of new smart devices because of a lack of new technology and as they await the rollout of 5G. For automobiles, ride-hailing apps globally, especially in China, have reduced demand for cars. Unless there are big improvements in the convenience of driving and charging a new energy car or even mass production of driverless cars, we believe this structural change in private cars will continue.
  • Third, if the trade dispute escalates further, we expect the U.S. to push even harder on its Western allies not to use China-made 5G products and parts, which will dampen China's future exports.

Disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.