Foreign-funded banks attribute China’s export growth to competitiveness, rising demand

15.06.2024

BEIJING, June 15 (Xinhua) — China’s exports have demonstrated remarkable resilience and growth potential thanks to stronger global competitiveness of Chinese goods and improved external demand, experts from multiple foreign-invested financial institutions have said.

“Chinese exporters have been doing pretty well, independent of month-to-month fluctuations,” said chief economist and managing director of DBS Group Research Taimur Baig, adding that the exports have supported the continued recovery of the Chinese economy.

In May, the country’s exports rose 11.2 percent year on year in yuan terms and gained 7.6 percent in U.S. dollar terms from a year earlier, both registering faster growth compared with that in April, according to the latest data from the General Administration of Customs.

Data shows that China’s exports to both developed economies and emerging markets, including the United States, the European Union (EU), the ASEAN, and Brazil, have improved in May compared with the previous month.

Zhu Haibin, chief China economist at J.P. Morgan, said China’s efforts in diversifying its exports destinations in recent years have paid off.

The country’s exports destinations were dominantly developed economies such as the United States, the EU and Japan in the past, but the proportion of China’s exports to emerging economies, including Latin America, Africa and ASEAN, continues to rise in recent years.

Xiong Yi, chief China economist at Deutsche Bank, said the better-than-expected May exports performance was largely supported by exports to the Association of Southeast Asian Nations (ASEAN) and Latin America.

In terms of the country’s export structure, exports of high-end, smart and green products have sustained sound growth momentum.

In the first five months of the year, machinery and electronic products, that are usually considered products with high-tech and high added-value, accounted for nearly 60 percent of the total exports.

During this period, exports of ships, electric vehicles (EVs) and household appliances increased by 100.1 percent, 26.3 percent and 17.8 percent year on year, respectively.

The bottoming out global demand for electronics has boosted China’s exports, noted Ji Mo, chief China economist of DBS Group Research.

Diversification of China’s export products, such as EVs, solar panels, lithium batteries in recent years, is also an important contributor to China’s exports growth, said Zhu.

He added that rising inflation and labor costs in Europe and the United States have also allowed Chinese products to gain more competitive edge.

Experts are confident about the prospects of China’s exports, estimating that the growth momentum will be maintained in the coming months.

“Continued solid trade activity in China’s neighboring economies indicates a steady recovery in external demand,” said Wang Tao, chief China economist and head of Asia Economic Research at UBS.

Lu Ting, chief China economist at Nomura, estimated China’s export growth may rise further this month and will likely remain high over the next few months.

He noted that due to the price competitiveness of Chinese goods, the low base effect and other factors, Nomura raised its 2024 China export growth forecast by 0.7 percentage points at the beginning of this month.  ■

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