Some people believe that although China's exports to the United States have decreased on the surface, they are actually still exporting indirectly through third countries, such as Vietnam, India, Mexico, Canada, etc. That is, Chinese products are sold to these countries first, and then they resell them to the United States.
Is there any data to prove this claim?
We have the right to put forward our own views on the changes between China and the United States, but we cannot imagine them out of thin air, nor can we rely only on our own guesses. We have to look at the data released by the General Administration of Customs to draw the right conclusions.
According to the General Administration of Customs, in the first half of this year, China's exports to the United States totaled 2,393$5.1 billion, up from $2,914 in the same period last year$300 million, down 520$7.9 billion, a decrease of 179%。
So, have China's exports to Vietnam, India, Mexico, Canada and other countries increased?If these countries' exports have increased by more than $50 billion, then it can show that China's indirect exports have indeed increased.
However, this is not the case. According to the data of the General Administration of Customs, in the first half of this year, China's exports to Vietnam were 662$500 million, exports to India were $565$3.2 billion, with exports to Mexico of $392$1.8 billion, exports to Canada were $219$9.3 billion. The total export value of these four countries was 1839$9.3 billion.
In the same period last year, China's exports to Vietnam were 704$3.8 billion, exports to India were $570$6.3 billion, with exports to Mexico of $367$8.3 billion, with exports to Canada of $272$5.1 billion. The total export value of these four countries was 1915$3.5 billion.
In other words, in the first half of this year, China's exports to these four countries not only did not increase by more than $50 billion, but decreased by about $7.5 billion.
In fact, with the exception of Russia, China's exports to its main partners are declining. This shows that China has not compensated for the loss of direct exports to the United States through indirect exports.
This is because global economic growth is slowing, external demand is sluggish, and imports and exports are shrinking in all countries. We can search the import and export data of Vietnam, India, South Korea, Japan, etc., and we can see this. In this context, the growth of Russian exports stands out.
Let's take a look at another point of view: the RMB exchange rate has overfallen.
It is argued that the dollar index reached a high of almost 115 in September 2022 and has fallen to less than 104 in August this year. While the dollar remains strong, the pressure on the renminbi has eased.
According to common sense, the RMB exchange rate should be somewhat. However, the offshore renminbi fell below 7 against the US dollar on August 153. On the morning of August 16, it fell below 731, this seems to say: the RMB exchange rate has overfallen.
This view is wrong!The rise or fall of the U.S. dollar index does not necessarily determine the trend of the RMB exchange rate. The U.S. dollar index simply reflects the strength of the U.S. dollar relative to a basket of currencies that does not include the renminbi.
Changes in the U.S. dollar index mainly affect six currencies: the euro, the British pound, the Japanese yen, the Canadian dollar, the Swedish krona, and the Swiss franc. Changes in the RMB exchange rate are not directly related to the US dollar index, only indirectly.
This means that changes in the U.S. dollar index will not necessarily lead to changes in the RMB exchange rate immediately, and sometimes the RMB will have its own independent trend. Since it is an indirect relationship, it cannot be said that the dollar index has fallen, and the RMB exchange rate should rise, otherwise it will be overfalling.
Recently, the main reason for the RMB exchange rate** is that China's economic growth rate in the second quarter was lower than expected, and on August 15, the central bank carried out a reverse repo operation of 204 billion yuan and a one-year medium-term lending facility (MLF) operation of 401 billion yuan, and the interest rates of both were lower than the previous value, which was the second interest rate cut in the past three months, which made the international investment banks bearish on the yuan and bullish on the dollar. At the same time, it also shows that the country has a higher tolerance for fluctuations in the RMB exchange rate.