General

Last November, a large number of empty containers piled up in some ports in southern China. This phenomenon has caused many people to panic and speculate that China's exports have plummeted due to factors such as the pandemic, which in turn has affected the national economic trend.

However, with the release of the latest customs data released by the General Administration of Customs, we found that the two sets of data on import and export rose and fell, but there was a significant difference from our previous understanding. What is the current situation of our export trade?

1、 Exports have risen, imports have fallen, and trade surpluses have widened

According to customs data released by the General Administration of Customs, the total import and export volume in the first two months of this year was about 6.18 trillion yuan, a year-on-year decrease of 0.8%. But don't worry, this is the sum of one in and one out. On closer inspection, exports reached 3.5 trillion yuan, an increase of 0.9% compared to last year. On the contrary, imports fell to 2.68 trillion yuan, a decrease of 2.9%. Overall, the trade surplus has expanded by 16.2%, which means that January and February this year were more profitable compared to the same period last year.

In that case, let's see if any imported goods have decreased? The first is the decline in fossil fuels such as crude oil and natural gas. Customs data show that in the first two months of this year, crude oil and natural gas increased by 3.7% and 8.4% respectively compared to last year, while imports decreased by 1.3% and 9.4% respectively. In addition, the import of mechanical and electrical products, integrated circuits, and automobiles decreased significantly, respectively by 18.5% to 24.9%.

This represents a further downward trend in China's demand for fuel vehicles and imported vehicles since last year. According to statistics, the sales of imported vehicles in China fell by 10.8% in 2022.

According to media statistics, the sales of ultra luxury brands such as Porsche and Maserati in China increased somewhat in 2022, but the increase was not significant, with a cumulative increase of over 500 units throughout the year. However, the import volume of luxury brands such as Mercedes Benz, BMW, Audi, Lexus, and other first-tier and second-tier luxury brands, as well as non luxury brands such as Japanese and German brands, decreased significantly by over 100000 vehicles, with a decrease of nearly 18% to 23%.

Currently, domestic car brands are gradually rising, especially when the main imported vehicles are fuel vehicles, and new energy vehicles are strongly supported in various regions. Both imported crude oil and imported vehicles are showing a broad downward trend. This in itself is a manifestation of our national strength and is gratifying.

2、 Exports have risen and fallen, where have they fallen?

The top four trading partners of China are ASEAN, the European Union, the United States, and Japan. According to customs data, in the first two months of 2023, China's exports to the EU and the United States both fell, but its exports to ASEAN and Japan increased. Even so, China's total exports have declined in some categories, mainly clothing, textiles, and plastics.

Once upon a time, all over the world were wearing clothes, shoes, and hats made in China. A series of sports shoe brands from Fujian and other places, including Anta, were originally contracted for foreign brands such as Nike. From "rough manufacturing" at the beginning to "make in China" around the world, labor-intensive industries represented by clothing products have driven China's export trade for many years.

However, with the continuous growth of China's economy, the continuous improvement of the education level of China's labor force, and the continuous increase in labor costs, this labor intensive industry no longer seems to have a demographic advantage. As costs become increasingly expensive, profiteering foreign brands gradually shift their orders to cheaper locations for OEM.

When we go into the mall again to see sports brands such as Nike and Adidas, and carefully examine the washing labels of these clothes, the commonly seen "make in China" in the past has become more difficult to see, but has been replaced by "made in Vietnam" and "made in Indonesia".

According to customs data, Vietnam's total exports of textiles and clothing rose to $71 billion last year, an increase of 8.8% compared to the previous year, especially for shoes and bags, which increased by 30% year-on-year. Obviously, one of them grabbed an order from China.

3、 Import and export trade cannot only look at figures

Although China's exports of plastics and textiles have experienced a significant decline in a short period of time due to factors such as the global economic downturn and the gradual transfer of orders to Southeast Asia, this does not represent a downward trend in China's economic development.

Just two or three years ago, foreign brand joint venture vehicles were still mainstream in China, and most of the online rental vehicles were Korean or Japanese brand vehicles. Now, most of them have become domestic new energy vehicles. On the other hand, the export volume of Chinese cars has surpassed that of Germany and leapt to the second place in the world. The world has to turn around and buy Chinese cars.

Developed countries, represented by the United States, Japan, and Europe, are all economically driven by high-tech, high-end manufacturing, and high-value brands. Industries such as clothing, plastics, and other labor intensive industries must face a reshuffle, which will bring pain to these industries, but also bring new vitality.