In November 2023, China's merchandise exports continued to grow, bringing a positive signal to the development of foreign trade. For the first time in the past seven months, China's exports have turned positive. Exports in November increased by 05%, that's good news. In the fourth quarter, the positive factors for the development of China's foreign trade continued to increase, and the forward trend of stability and improvement continued to consolidate.
1.Growth momentum brought about by the upgrading of foreign trade structure: China's foreign trade structure continues to upgrade, and high-tech commodities such as new energy maintain a high degree of export prosperity, injecting impetus into exports. With the increase in global demand for environmentally friendly energy, China's export advantage in this field has been further enhanced.
2.The recovery of U.S. market demand: The U.S. economy is changing from the previous "destocking" to "replenishing inventory", superimposed on the private resilience is still strong, and the recent manufacturing investment is hot, which has formed a certain support for China's commodity exports. The recovery in demand from the U.S. market has played a positive role in the growth of China's exports.
3.Low base effect drives export growth: In the same period last year, due to the disruption of the epidemic, many places are still suffering, and the export base is low, so the export growth rate in November this year is higher. This low base effect boosted the strength of export growth in November.
4.Competitiveness Gains from RMB Depreciation: As domestic demand recovery has been slow to meet market expectations, Chinese companies have improved their competitiveness in overseas markets by lowering the selling prices of dollar-denominated goods. In addition, the depreciation of the renminbi has also created a certain competitive advantage for China's exports.
According to Japanese media reports, Chinese exporters are lowering the prices of most goods, including steel, automobiles, and electronic components, in order to boost exports. The data shows that among the 17 categories that can calculate the unit price through the ** statistical flash report, 71% of the category unit price has decreased compared with the same period last year. In the case of hot-rolled coil, for example, exports to East Asia in November were 14% lower than the March high. Although the total value of automobile exports increased by 28% year-on-year, the unit price decreased by 10%.
In addition, the export unit prices of household appliances, bags and shoes have also decreased, falling by about % respectively. Japanese media believe that the trend of Chinese enterprises selling excess inventory through price reductions has intensified, trying to expand the demand of external markets and improve the competitiveness of Chinese goods in overseas markets.
There are pros and cons to expanding exports through price reductions. The benefit is that it can promote the export growth of Chinese goods, expand market share, and at the same time alleviate inflationary pressures in major countries. However, the disadvantage is that selling at low prices may also trigger new frictions, which may lead to anti-dumping sanctions in other countries. For example, the European Union has begun an investigation into whether Chinese-made battery electric vehicles are hindering competition through low-price sales violations.
The growth of China's merchandise exports in November was driven by a combination of factors such as the upgrading of the foreign trade structure and the recovery of market demand in the United States. At the same time, the price reduction sales also provide a certain competitive advantage for China's exports. Although selling at a low price has its pros and cons and can cause ** friction, the export growth it brings in the short term is positive for the Chinese economy. Looking ahead, China should continue to optimize its foreign trade structure, improve product quality and added value, and strengthen its innovation capabilities to achieve more sustainable foreign trade development.
In this era of globalization, China's exports, as the world's factory, play an important role. With the rapid development of China's economy and the improvement of brand image, the competitiveness of China's goods in the international market has been continuously enhanced. However, it is not sustainable to rely solely on price reductions, and measures such as technological innovation and brand building are needed to enhance the added value and competitiveness of Chinese goods. At the same time, it is also necessary to pay attention to the risks brought by friction and seek a more balanced and sustainable path for the development of foreign trade.