Chinese exports still outperforming
Simon Ward
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The dollar value of Chinese exports fell by 5.5% in the year to August, after an 8.3% annual decline in July. This weakness, however, mainly reflects the strong dollar: Chinese exports are still gaining market share.
The dollar value of global exports fell by 10.4% in the year to June, the latest available month, based on data compiled by the Dutch CPB research institute. Chinese exports rose by an annual 2.8% in the same month.
The June numbers are not exceptional: the annual change in Chinese exports has been mostly significantly higher than that of the global total recently – see first chart. There is little sign, in other words, that the trend increase in China’s export market share is slowing, let alone stalling or reversing.
German July trade figures also released today showed 6.2% annual growth in exports – but in devalued euro terms. Expressed in dollars, German exports were down by 13.6% in July – much worse than the 8.3% Chinese decline.
China is also outperforming other Asia countries: Korean and Taiwanese exports, for example, were down by 14.7% and 14.8% respectively in the year to August.
A crude seasonal adjustment of the Chinese data suggests that exports bottomed in March*, recovering further in August – second chart.
The rising market share contradicts claims that an uncompetitive exchange rate is depressing exports and growth. A further devaluation would probably have a negative net impact on growth, as additional capital outflows resulted in tighter domestic monetary conditions.
*The unusually late timing of the New Year holiday may have raised February exports at the expense of March.
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