CICC: Exports remain stable after excluding short-term factors

In November 2024, exports in US dollars increased by 6.7% year-on-year (compared to +12.7% in October 2024), while imports decreased by 3.9% year-on-year (compared to -2.3% in October 2024), both lower than market expectations (Bloomberg's export and import market expectations were 8.7% and 0.9%, respectively). The compensatory exports after the typhoon raised the export base in October, while external demand remained stable. The front-loading effect of exports has not yet become a dominant factor. The decline in imports has widened, which is not only due to weak domestic demand but also possibly influenced by short-term factors.

The base has risen, while external demand remains stable. The base in November has increased, with a four-year compound growth rate of 7.2% for exports in November 2023, higher than the 6.5% in October 2023. The compensatory exports after the typhoon boosted exports in October this year, with customs in Jiangsu, Zhejiang, and Shanghai, which were more affected by the typhoon, seeing a month-on-month increase of 6.0% in October, while other customs experienced a month-on-month decline of 0.8%.

After this compensatory export, the month-on-month export in November was relatively weak, but the absolute amount of exports in November remained robust. From the perspective of external demand, it remained generally stable, with the manufacturing PMI of developed countries in November slightly rising by 0.3ppt to 48.4%, but still within the contraction zone.

The front-loading effect of exports has not yet become a dominant factor. From the perspective of major export regions, exports to the EU, the US, and ASEAN in November increased by 7.2%, 8.0%, and 14.9% year-on-year, respectively (compared to 12.7%, 8.1%, and 15.8% in October). Among them, the year-on-year decline in exports to the US was relatively small, and a small amount of front-loading effect cannot be ruled out, but macroeconomically, the front-loading effect of exports has not yet become a dominant factor.

Based on the experience of China-US frictions from 2018 to 2019, the front-loading effect of exports generally occurs during the period from the announcement of the tariff list to its official implementation. Given the current significant uncertainty regarding potential trade frictions and the costs of inventory held by importers, the front-loading of exports is not obvious.

From the perspective of major export products, most show a marginal decline in year-on-year growth rate consistent with the overall export trend. Among them, exports of unwrought aluminum and aluminum products in November increased by 40% year-on-year (compared to 31% in October), with the marginal increase in year-on-year growth possibly influenced by concentrated exports before the adjustment of the export tax rebate policy on December 1.

Automobile exports turned negative year-on-year at -7.7% (compared to +3.9% in October). Although there was some impact from the formal implementation of additional tariffs by the EU, it likely reflects a decline in global automobile demand. In November, South Korea's daily automobile exports decreased by 12% year-on-year (compared to +0.5% in October).

The decline in imports has widened, which is not only due to weak domestic demand but also possibly influenced by short-term factors. Although counter-cyclical adjustment policies have been further strengthened, endogenous demand still needs to recover. From the perspective of the year-on-year quantity of major imported goods, there was marginal improvement in crude oil and automobiles, while copper, iron ore, coal, plastics, and integrated circuits all saw marginal declines. In November, imports from the US decreased by 11% year-on-year (compared to +7% in October), and soybean imports decreased by 10% year-on-year (compared to 57% in October), with short-term factors possibly influencing these results Looking ahead to December exports, we expect that the base will decline somewhat, and while external demand may marginally weaken, it will remain overall stable, with December exports likely maintaining a year-on-year growth of around 7%. As for 2025, in addition to a potential slowdown in overseas demand, more attention should be paid to the risks of potential trade frictions.

Chart 1: Seasonal Export Amount

Source: Wind, CICC Research Department

Chart 2: Seasonal Import Amount

Source: Wind, CICC Research Department

Chart 3: Volume of China’s Ocean Freight Ships Docking

Source: Wind, CICC Research Department

Chart 4: Year-on-Year Export Destinations

Source: Wind, CICC Research Department

Chart 5: Year-on-Year Growth Rates of Exports and Imports to Major Regions (Unit: %)

Note: The red part indicates a year-on-year growth rate higher than the previous month. Source: CEIC, CICC Research Department

Chart 6: Year-on-Year Growth Rates of Major Commodity Export Amounts (Unit: %)

Note: \\ represents major categories of goods, which may include related goods already listed in this table; the red part indicates a year-on-year growth rate higher than the previous month. Source: CEIC, CICC Research Department

Chart 7: Year-on-Year Growth Rates of Major Commodity Imports (Unit: %)

Note: \* represents major categories of goods, which may include related goods already listed in this table; the red part indicates a year-on-year growth rate higher than the previous month. Source: CEIC, CICC Research Department Author of this article: Zheng Yuchi S0080520110001, Zhang Wenlang, Source: CICC Macro, Original Title: "CICC Macro | Exports Remain Stable After Excluding Short-Term Factors - November 2024 Import and Export Commentary"

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