Although the current trade dispute is "smoothing", with the improvement of the peripheral economy, the probability of China's export recovery turning from anticipation to reality is increasing, and exports are expected to become the engine of economic growth.
The data shows that the trend of China's export bottoming has been basically established. Since March, the export growth rate has been positive for five months, and the export volume in July and August has exceeded 100 billion US dollars. Benefiting from the increase in external orders, after the second quarter, the operating rate of coastal export-oriented enterprises increased, and there was a labor shortage in some areas. The Leading Indicator Manufacturing Purchasing Managers Index (PMI) has been in the expansion range of 50 or more for 7 consecutive months, and the sub-indexes of new orders, new export orders, purchases and employees continue to strengthen. The PMI index is ahead of China's export growth rate for about 5 months. Coupled with the low export base after September last year, the export decline is expected to narrow significantly in the fourth quarter.
Whether exports can go out of the valley is one of the important factors determining China's economic prospects. From the path of China's economic recovery, the government-led recovery is gradually being replaced by a market-led recovery. The government-led recovery will create capacity, and if external demand and consumption are not coordinated, it is likely to exacerbate economic imbalances. Fortunately, the economic recovery in developed countries - deleveraging destocking is coming to an end - economic expectations are improving - private investment and consumption growth - the logical chain of external demand has brought significant opportunities for Chinese exports. A modest recovery in the export industry chain will help China enter a full recovery.
From the meso level, textiles and garments, mechanical and electrical products, metal products, furniture and Other external industries rely on large, and small industries with internal policies are expected to get out of the woods. Taking into account the spillover effects of export-investment and export-income, external demand recovery will affect the middle and upper reaches from the downstream, from production impact to investment. As downstream product orders and sales increase, export companies will expand investment in raw materials and equipment, which will lead to increased imports and promote the recovery of trading partners. Export enterprises are still large employers. The increase in the operating rate and the increase in employment will also help the residents to increase their income, and ultimately to increase consumption.
However, the sustainability of the export recovery remains to be seen. The possibility of a double dip in the developed economies remains, and the changes in consumer culture in Europe and the United States and the contraction of consumer credit have constrained the scale of export recovery. In addition, exchange rates and factor prices are still uncertain. With the depreciation of the dollar and the recovery of trade, the renminbi is once again facing pressure to appreciate. More importantly, global trade protectionism is intensifying, especially as a large exporter of labor-intensive products, which is becoming a major victim of trade friction.
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