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.
Given that Guangdong’s high-tech manufacturers have been gearing themselves more toward domestic demand, these trade numbers augur well for industrial output data.
In any case, the August trade performance helped raise the province’s accumulated total for the first eight months of the year. Exports were RMB 2.74 trillion, up 3.2% in the year to end-August. Imports, at RMB 1.77 trillion, were still in the red, at – 5.1%.
High-tech products, which have a wide definition and therefore make up the bulk of Guangdong exports, were up 2.5% at RMB 1.88 trillion. Integrated circuits grew the strongest, albeit from a small base, up 64.8% to RMB 77.68 billion. Home appliances were up 5.3% to RMB 140.13 billion.
Fearless in the face of the US-China trade war, the Nanfang Daily noted that: “The trade structure continues to be optimized, and the new format has strong growth momentum.” What that means is that new growth categories are doing well, particularly the bonded logistics zones and the cross-border e-commerce zones. Bonded logistics is a heavyweight, at RMB 624.64 billion, yet it was up 8.6%, while cross-border e-commerce, still small at RMB 61.51 billion yuan, shot up by 27.6%.
The province’s pride and joy – private enterprise – saw its share of overall trade rise 2.3 percentage points, growing 4.4% YoY, accounting for 51%, and the proportion increased by 2.3 percentage points.
In terms of source markets, it would appear that the EU and ASEAN countries continue to go where US firms cannot tread without encountering tariffs. From January to August, ASEAN was up 4.8% to RMB 613.67 billion, while the EU was up a whopping 12.3% to RMB 567.72 billion. Countries along the Belt and Road Initiative, which include those from the EU and ASEAN, but also central Asia, the Middle East and Africa – i.e. it’s a symbolic number – were up 5.1% to RMB 1.06 trillion.
Looking more carefully at imports, it would appear that Guangdong’s consumers are doing fine. Imported consumer goods were up 18.9% to RMB 141.55 billion.
Now we just need to sit. And wait. Figures for output of manufacturing and services should be coming soon.