How is China’s recent export performance? #PMI for new export orders has been declining since May, but total #exports have maintained a fast growth, especially in the last two months, setting new record highs for the same period. Such divergence could be confusing. 1/5
In a recent article, CF40 research associate and deputy director of the Research Department ZHU He says China’s surprisingly strong #exports after July come more from increased cost than demand. 2/5 mp.weixin.qq.com/s/lUuGDhKrSnDr…
ZHU He analyses the #export growth rate of 6512 categories of products over the past six months by splitting the two dimensions of volume and price. The result shows that 15 percentage points of the 25% export growth rate in August actually came from product #price hikes. 3/5
Such #export expansion, driven more by price than scale, won’t bring any substantial increases for enterprises; even worse, their profits might be squeezed, as the increase in production and freight costs may not be fully passed on to the price. 4/5
For example, as much as the rise in #steel price, the profits in the steel industry only climbed by 10% yoy in July, because a large part of the price rise came from the cost rise instead of demand. And things could be worse for the downstream industry. 5/5
• • •
Missing some Tweet in this thread? You can try to
force a refresh
