Outlook for China trade growth positive but losing momentum, new index finds
The inaugural DHL Global Trade Barometer predicts a decline in seaborne trade as raw materials imports fall, but continued strength in air freight for exported goods
The outlook for trade growth in China remains positive but the country’s exports and imports are losing momentum, with seaborne trade set for a decline owing to a reduced appetite for industrial raw materials, a new index has found.
The inaugural DHL Global Trade Barometer, launched this month by the air cargo company and consulting firm Accenture, predicted high growth rates in Chinese airborne trade, particularly for exports of consumer goods.
The survey’s overall trade index, which is based on import and export data for a number of commodities in seven countries, stood at 59 for China in January, the lowest among the seven – the other six being the US, Germany, South Korea, India, Japan and the United Kingdom. A reading above 50 signals growth while one below indicates a contraction.
The China index was down from a reading of 63 in December, which was calculated for reference purposes based on the same criteria and which indicated a loss of momentum.
“With China’s economy shifting towards a more consumption- and service-driven model, it’s no surprise that the growth outlook for ocean freight is significantly lower than before,” said Kelvin Leung, chief executive of DHL’s Asia-Pacific forwarding business.
“China’s push to raise higher-quality global exports and domestic consumer spending are having the desired effect on trade and future economic development.”
The survey could add to concerns over China’s economic outlook, especially as trade frictions rise between China and the US, where President Donald Trump has been taking aim at what he sees as China’s unfair trade practices and policies.
In the survey, China’s ocean trade index dropped 7 points from the December calculated value to 52, while that for air trade stood at 70, the same as the calculated December figure. By commodity, the index for basic raw materials was 53 in January from December’s 52, but industrial raw materials fell to 42 from 57. The hi-tech index dropped to 60 from 67.
Still, DHL said China’s efforts to move its products up the value chain and the transition into a consumer-driven economy bode well for the long-term outlook.
Official Chinese figures showed that exports and imports rose 14.2 per cent year on year in 2017, the first time they had grown since 2015. Total exports and imports were worth 27.79 trillion yuan (US$4.4 trillion) last year, while the country’s trade surplus hit 2.87 trillion yuan.
DHL also played down fears of a trade war as tensions rise between the US and China.
“I don’t believe protectionism will succeed,” said Oliver Wegner, a senior development manager with DHL.