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Summary of Key Points from the Conference Call Industry Overview - **Industry**: Chinese Exports and Cargo Throughput - **Date of Data**: Up to August 27, 2023 Core Insights 1. **Export Trends to the US**: - Exports to the US softened year-on-year despite the extension of the tariff truce. - Containership departures for the US declined by **20.2% YoY** in the 15 days ending August 27, 2023. - US import bills for seaborne imports from China dropped by **31.3% YoY** in the week ending August 23, 2023, indicating a weaker trend compared to the previous week [2][15]. 2. **Overall Cargo Throughput**: - The Ministry of Transport (MoT) reported a **9.6% YoY** increase in cargo throughput for the week ending August 26, 2023, compared to **3.1% YoY** a week earlier. - For the entire month of August, cargo throughput is expected to grow by **4.7% YoY**, down from **10.9% YoY** in July [3][6]. 3. **Supply Chain Dynamics**: - The minor weakness in US routes was offset by increased containership departures to other countries. - Anticipation of a supply chain reshuffle is expected to provide a boost, particularly with the peak season for consumer electronics approaching [3]. 4. **Future Outlook**: - Despite the current softness in exports to the US, the overall export growth is expected to remain positive in August, driven by factors such as supply chain adjustments and seasonal demand [3]. Additional Important Information - **Tariff Differential**: The narrowing of tariff differentials is seen as a potential benefit for China, although it may not significantly impact the current export trends to the US [2]. - **Data Sources**: The insights are derived from high-frequency trackers and reports from Citi Research, utilizing data from various sources including Bloomberg and CEIC [11][12]. This summary encapsulates the key points regarding the current state of Chinese exports, particularly to the US, and the overall cargo throughput trends, providing a comprehensive view of the industry dynamics as of late August 2023.

Summary of J.P. Morgan's Research on China's Trade Data Industry Overview - The report focuses on China's trade data for July, highlighting the performance of exports and imports in the context of global economic conditions and trade dynamics. Key Points on Exports - **July Exports Performance**: Exports declined by 1.9% month-on-month seasonally adjusted (m/m sa) but increased by 7.2% year-on-year (y/y), surpassing J.P. Morgan's expectation of 6.2% y/y and market consensus of 5.6% y/y [1][4] - **Trend Growth Momentum**: The trend growth momentum slowed to 0.7% over three months annualized (3m/3m saar), down from 7.5% in June and 20.9% in May, indicating a significant deceleration [1][4] - **Trade Surplus**: The trade surplus narrowed to US$98.2 billion from US$114.8 billion in June [1][4] - **Export Destinations**: Exports to the US fell by 6.6% m/m sa after a recovery of over 20% in June, while exports to Japan, the EU, and ASEAN also saw declines [2][4] - **Product Breakdown**: Exports of low-end consumer goods decreased by 5.3% m/m sa, mechanical and electrical products by 1.2%, and high-tech products by 1.8% [3][4] Key Points on Imports - **Import Growth**: Imports grew by 4.1% y/y and 1.6% m/m sa, which was better than J.P. Morgan's forecast of -0.3% y/y and market consensus of -1.0% y/y [1][4] - **Commodity Demand**: The increase in imports was partly driven by strong demand for refined petroleum products, which rose by 18.8% m/m sa [6][4] - **Domestic Demand**: Overall, imports have been softer than expected, reflecting weak domestic demand [6][4] Future Outlook - **Export Projections**: Overall exports are expected to decline by 9% in 3Q compared to a 7.5% increase in 2Q, primarily due to lower global demand and the end of US front-loading [4][7] - **Impact of Tariffs**: The report suggests that punitive US tariffs on transshipment will lead to a shift in the share of exports towards the US at the expense of ASEAN [4][8] - **GDP Contribution**: Net exports contributed 31 percentage points to real GDP growth in 1H, but this is expected to drop to 13 percentage points for the full year as external demand slows [7][4] Additional Insights - **Trade Dynamics**: The report notes a reversal in trade dynamics since the implementation of the Liberation Day tariffs, with exports to the US declining sharply while those to ASEAN and the EU increased [4][8] - **High-Tech Products Resilience**: Despite the overall slowdown, imports of high-tech products maintained solid trend growth for six consecutive months, indicating resilience in this segment [6][4] This summary encapsulates the critical insights from J.P. Morgan's analysis of China's trade data, providing a comprehensive overview of the current state and future expectations of the trade landscape.

Investment Rating - The report forecasts China's headline exports growth at 3.3% YoY for June [1][3]. Core Insights - Shipping to the US experienced volatility but has recently rebounded, indicating a tentative trough for US-China trade may hold [1][2]. - Overall cargo throughput in China grew at a slower pace, with a 0.6% YoY increase in the week ending June 29, down from 3.6% YoY the previous week [3][7]. - Container exports from China showed a steady increase of 15.4% YoY in the week ending June 27, supported by favorable base effects [3][11]. - Concerns are rising regarding the implications of the US-Vietnam trade deal and other trade negotiations ahead of the July 9 tariff deadlines [4]. Summary by Sections Export Trends - Exports to the US saw a decline of -6.0% YoY in the 15 days ending July 2, marking the first negative reading since early June [2][14]. - US seaborne bills for imports from China contracted -32.6% YoY in the week ending June 29, compared to -23.9% YoY the week prior [2][15]. Cargo Throughput - High-frequency indicators for overall cargo throughput remained steady, with a 0.6% YoY growth reported [3][7]. - Container departures from China to non-US destinations increased, indicating a shift in trade patterns [3][8]. Tariff Considerations - The report highlights the potential impact of narrowing tariff differentials between China and the Rest of the World (RoW), which could benefit China's direct exports to the US [4]. - Tighter rules on country of origin to curb transshipment are anticipated, with the implementation details being crucial to monitor [4].

Investment Rating - The report maintains a cautious outlook on China's exports, forecasting a contraction of -5% YoY for the entire year due to prohibitive US tariffs affecting approximately 80% of China's exports [7]. Core Insights - China's exports growth surged by 12.4% YoY in March, significantly exceeding market forecasts, while imports contracted at a slower pace of -4.3% YoY, leading to a trade surplus of US$102.6 billion [3][4]. - The strong export performance is attributed to front-loading activities in anticipation of US tariffs, with exports to the US rising by 9.1% YoY in March [6]. - The global manufacturing cycle remains resilient, supporting China's exports in machinery and electrical products, although semiconductor-related exports are moderating due to slowing demand [6][7]. Summary by Sections Exports Performance - Exports growth in March was robust, driven by favorable base effects and broad-based recovery across trade partners [4][6]. - For Q1 2025, exports grew by 5.7% YoY, while imports fell by 7.0% YoY, marking a six-quarter low [3]. Import Dynamics - Imports continued to contract, primarily due to sluggish domestic demand, with significant declines in iron ore and agricultural commodities [5][6]. - Notably, iron ore imports fell by -27.0% YoY in value, while oil imports showed improvement, declining only -3.7% YoY [6]. Trade Relationships - China's exports to ASEAN and other emerging markets were strong, with exports to ASEAN increasing by 11.6% YoY in March, benefiting from trade re-routing and China's role as an intermediates supplier [6][7]. - Direct exports to the US, which accounted for 14.7% of total exports in 2024, are expected to decline due to high tariffs, but China may benefit from front-loading by other trade partners [7].