After accounting for price effects and seasonality, Capital Economics estimated that export volumes rose by 1 per cent last month, reaching a record high.

China exports edge up for first time in 7 months in November, imports decline

“China’s export growth turned positive in November. The improvement in exports is broadly in line with market expectation,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

“Indeed, the sequential growth in China’s exports in the past few months strengthened. There are green shoots in other Asian countries’ export data as well in recent months.”

But Ding Shuang, chief Greater China economist at Standard Chartered Bank, said the modest improvement in China’s exports was largely due to the low base of comparison as the overall trade situation has deteriorated over the past two years.

“China’s overall trade is still sluggish,” Ding said.

2. Imports disappoint, but outlook strong

China’s imports fell by 0.6 per cent in November to US$223.5 billion, a pronounced drop compared to October’s 3 per cent growth, and fell short of Wind’s prediction for growth of 3.5 per cent.

“Import volumes declined after hitting a record high in October, but they are likely to remain strong in the near-term as fiscal support boosts commodity demand,” said analysts at Capital Economics.

3. Trade surplus grows

China’s total trade surplus in November stood at US$68.3 billion, up from US$56.5 billion in October.

4. US exports up, but EU and Asean fall

China’s exports to the United States grew by 7.35 per cent year on year, rising for the first time since July last year, having fallen by 8.19 per cent in October.

China’s exports to the European Union fell by 14.51 per cent, down further from a fall of 12.56 per cent in October.

And China’s exports to the Association of Southeast Asian Nations also dropped by 7.07 per cent from a year earlier, although the fall was slightly narrower than the 15.1 per cent decline in October.

5. Export growth not sustainable amid price cuts

With the recent strength in China’s exports at least partly fuelled by firms slashing prices to gain market share, analysts at Capital Economics said they do not expect the resilience to last.

“This is not sustainable and is negatively affecting firms’ profit margins, which have dropped near levels not seen since at least 2010, excluding the initial pandemic lockdowns,” they said.

“Without the support of price cuts, exports are unlikely to defy the slowdown in growth among Chinas major trading partners, which we expect to continue in the first half of next year.”

Imports, though, are likely to hold up better in the near term, they added, as an increase in infrastructure spending should support demand for metals.

“While export growth improved, it is unclear if exports can contribute as a growth pillar into next year. The European and US economies are cooling,” added Zhang at Pinpoint Asset Management.

“China still needs to depend on domestic demand as the main driver for growth in 2024. The fiscal policy stance is the focus for the market.

Additional reporting by Mia Nulimaimaiti