Category Archives: Trade

Guangdong trade holds steady

August trade data is in for Guangdong, and it is not looking too shabby. According to official numbers reported by Nanfang Daily, exports remained in positive territory  at +1.23% YoY, and even picked up from the low growth point seen in July of +0.5%. Imports were still weak, but the pace of the drop, at -8.4%, was an improvement on July’s -12.7%. 

We had been intuitively expecting worse, given the China macro data released last week showing industrial production had slowed sharply in August. We still don’t have that data for Guangdong, so we cannot make comparisons yet. Moreover, in issuing these trade numbers, it seems like Guangdong has jumped the gun on the custodians of the national accounts, because China’s trade data for August isn’t out yet. 

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US-China standoff takes toll on August data

We will need to wait awhile for provincial data to follow, but it would not be surprising if Guangdong takes the national lead in showing weakness during August. Data for China’s trade released over the weekend showed an unexpected drop in exports and imports, as the trade war continues to bite.

Analysts quoted by Reuters said it was clearly the result of a weaker than expected external environment, and came despite the devaluation of the Renminbi. 

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Guangdong keeps exports up, again

While Hong Kong’s trade numbers deteriorate amid a worsening global economy, Guangdong’s are staying in positive territory. Could this be due to relocation of production of older industries from the province to countries in Southeast Asia, particularly Vietnam? It is hard to tell from the latest data, but it is a plausible theory.

Guangdong’s trade with ASEAN members (including Vietnam) rose 5.3% in the first seven months of the year. At RMB524.91 billion, it now accounts for 13.5% of Guangdong’s total foreign trade. However, the province’s resilience in the face of the US-China trade war is not only showing up in the nearby region. Trade with the European Union – hardly a low-cost processing center –  rose 12.7% in the first seven months. At RMB487.66 billion, it now accounts for 12.6% of Guangdong’s total foreign trade.

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HK exports plunge again

Economic news today is not all about resilience in the GBA. Hong Kong’s exports are way down in July, despite those from its GBA counterparts being mostly up. We don’t know why; we need someone from the TDC to explain it. Anyway, here is the SCMP’s article on it.

The SCMP also has some interesting analysis today on economic conditions in Hong Kong, China and the US that are worth reading. Tom Holland’s column today is important for anyone who questions the dollar peg; Andy Xie, meanwhile, takes a hard look at the US, where he sees President Trump deciding policy based on what is good for the stock market, and little else; and David Brown argues that what the world needs more of is less neoliberalism. Which is  what China has been focused on over the past decade, we would argue, and is clearly prepared to continue doing for the foreseeable future.

Cross-border e-commerce surges

Guangdong may be weathering a difficult external trade environment, yet growth in one key segment is exploding: cross-border e-commerce. In the first half of this year, imports and exports ordered and shipped via the internet grew 76.8% to RMB43.02 billion. Nearly all went through special bonded zones in Guangzhou, Shenzhen, Zhuhai and Dongguan, where 3,000 enterprises have clustered to take advantage of easier tax and other regulations.

Admittedly, this is still a small drop in the bucket. The province’s overall trade was worth RMB 3.28 trillion in the first six months, up 1.3% year-on-year, accounting for 22.4% of China’s total imports and exports. More than half was accounted for by private enterprises, which saw their trade numbers grow 5.9%, up 2.2 percentage points YoY.

Four GBA cities in trading top 10

China’s closely followed rankings of trading cities has four out of the top to from the Greater Bay Area. Shenzhen is No. 1, followed by Shanghai, Dongguan, Suzhou, Zhuhai, Xiamen, Guangzhou, Ningbo, Tianjin and Beijing.

Moreover, Dongguan is closing the gap on Shanghai, according to the, published by the General Administration of Customs of China. Zhuhai, meanwhile, jumped two positions from last year’s list. Driving this has been both cities designation as pilot zones for cross-border e-commerce. Zhuhai’s adoption was the most aggressive – perhaps due to its proximity to neighboring Macau. Last year, Zhuhai had cross-border e-commerce between January and June this year worth RMB220 million, up more than 26 times YoY. 

Shenzhen’s foreign trade stats point to change

There is an interesting change under way in the structure of Shenzhen’s economy, which is starting to show up better in its trade statistics. While imports continue to fall, exports are recovering, according to the latest data from the city’s Customs. Overall trade at RMB1.34 trillion for the first half was down 0.9% YoY, which was 0.6 percentage points lower than the previous five months, i.e. June saw a continued deceleration. This was due to sagging demand for imports, at RMB580.08 billion, which were down 7.8% (0.8 percentage points lower than the previous five months). Exports got a boost, however, apparently from targeted rebate support in certain sectors as well as new sectors taking off. They reached RMB757.14 billion, up 5.1%, which was 0.3 percentage points higher than the previous five months). 

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Vietnam passes HK’s container shipping volume

Hong Kong’s loss from the US-China trade war is Vietnam’s gain, judging by container shipping volumes. The number of containers shipped in the first half of this year dropped 8.1% to 9.06 million in Hong Kong, below Vietnam’s 9.1 million. And the trend is accelerating, as June saw a 11.3% drop.

Hong Kong’s decline is part of a longer-term trend, of course. Its port was once world No. 1, but has been slipping since 2004, and now ranks 7thwith less than half of Shanghai’s shipping volumes. The Hong Kong Shippers’ Council predicts volumes will drop by 8% to 10% this year.

Much of this is relocation of production facilities to Southeast Asia, where Vietnam stands out for low costs. According to data from A.T. Kearney, the US is expected to import US$64.8 billion of goods from Vietnam this year, up 36%. 

Read more in Chinese. 

Guangdong launches second-hand car exports

Guangdong is leading the country to launch exports of second-hand vehicles, sending out China’s first batch of second-hand cars yesterday through the Nansha port to Cambodia. It included nine vehicles worth RMB1.1 million. 

Guangdong is just the first among ten regions approved to export second-hand cars by the Ministry of Commerce this May. Guangdong Good Car Holdings, a certified B2B second-hand car trading platform, sent out the first batch. The company plans to export 3,000 vehicles this year. Guangdong will export more than 9,000 second-hand vehicles worth around US$50 million this year, according to the city government. 

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