China export performance “near-term positive, medium-term cautious”, says ANZ Bank

May 7, 2020

BEIJING - ANZ Bank says a surprising rise in exports from China in April was driven by electronic exports, which were up 5.6% y/y, based on ANZ calculations. Pending official numbers (at the time of writing), our calculation based on historical data suggests mechanical and electronic exports, which account for 58.8% of total exports, rose 5.6% y/y in April," ANZ says.

"In addition, textile exports (which include mask exports) also surged y/y after contracting in double-digits in Q1, lifting headline exports."


ANZ says China' s major commodity imports rose y/y in volume, thanks to recovering construction activities. "The drop in import value disguises the rise in volume of major commodities, including iron ore (+20.4% y/y) and coal (+34.8% y/y)," it says.


"This could be due to the policy push to infrastructure projects and the recovery in property investment." ANZ says the construction subindex in April's PMI survey rebounded to 59.7 from 55.1.


China's export outlook is described by ANZ as "near-term positive, medium-term cautious".


"Working from home arrangements during global pandemic may continuously spur demand for China's electronic exports as reflected in today's numbers," it says, pointing out that demand for electronic appliances (computers, monitors and even play stations) could continue to surge in the near future, offsetting the negative impact on other export items.


"US President Trump's latest threat to impose additional tariffs on China could also bring some front-loading exports in the near term," ANZ says.


"That said, the China-US relationship may remain a lingering concern for China's export outlook in the medium term." (ATI).