Just recently, the General Administration of Customs released a set of blockbuster data, causing the foreign trade circle to explode instantly.
The export growth rate in March dropped sharply from 21.8% in January to February to 2.5%, while imports surged by 27.8% year-on-year!
One side is the accelerator and the other is the brake. What signal is hidden behind this?
Let’s first look at the interpretation of March data.
In U.S. dollars, exports increased by 2.5% year-on-year (previous value was 21.8% from January to February), imports increased by 27.8% year-on-year (far exceeding the expected 5.6%), and the trade surplus was US$51.13 billion (significantly narrower than the previous two months).
There are three main reasons for applying the brakes on exit.
The first is the high base effect. The export base was high in the same period last year and the natural growth rate dropped; the second is the Spring Festival, which means the resumption of work is late this year and the release of production capacity is delayed; the third is the fluctuation of overseas demand, the unstable economic recovery in Europe and the United States, and the order rhythm is disrupted.
While imports are soaring and energy prices are rising, it is the bright line, while the demand for the AI industry is the hidden line.
The import volume of key components such as semiconductors and chips has increased significantly, indicating that domestic industrial upgrading and technological breakthroughs are accelerating.
The surge in imports has also directly led to the narrowing of the trade surplus. The past pattern of “making a lot of money” is changing.
Data is only the past, policy is the future.
The three major policy “variables” that took effect in April will directly affect the pocketbooks of foreign traders.
Variable 1: Major adjustments to export tax rebates (starting from April 1).
The export VAT rebate for photovoltaic products has been officially cancelled, the tax rebate for battery products has been reduced in stages, and the tax rebate for building materials (cement, glass, ceramics, etc.) and e-cigarettes has been cancelled.
This means that export costs will rise directly, and peers that previously relied on tax rebates to maintain profits may have to face being eliminated.
Photovoltaic, building materials and other industries will be reshuffled at an accelerated pace, and only companies with technology and brands will survive.
Variable 2: New national supply chain security regulations come into effect urgently (April 7).
This is China’s first administrative regulation specifically targeting industrial and supply chain security – the “Regulations of the State Council on Industrial Chain and Supply Chain Security.”
There are three highlights: reciprocal countermeasures, if you block my neck, I can block yours; cross-border compliance is strictly controlled, business activities and supply chain information collection activities in China must be compliant, otherwise heavy fines will be imposed; personal responsibility is strengthened, and both the person in charge of the company and those directly responsible may be held accountable.
Bosses who engage in foreign trade, especially those who provide supporting services to multinational companies, must go through legal affairs.
Variable three: Increased import and export credit (released on April 14).
The Ministry of Commerce and the Export-Import Bank of China have joined forces to increase credit support, focusing on developing diversified markets, cultivating new drivers of foreign trade (cross-border e-commerce, overseas warehouses, etc.), and serving the “Belt and Road” construction.
Companies that are short of money can focus on this.
The external environment is not peaceful, and global trade frictions are raging on all sides.
In terms of Sino-U.S. relations, although tariffs were suspended after the Geneva talks, Trump announced that if China provides military equipment to Iran, an additional 50% tariff will be imposed. At the same time, the United States announced a 100% tariff on imported patented drugs and pharmaceutical ingredients.
The EU will double foreign steel import tariffs to 50% starting in July, and has launched anti-dumping investigations into Chinese polyamide yarns, aluminum profiles, etc.
The Eurasian Economic Union has extended anti-dumping duties on Chinese truck tires until November 2026.
Brazil has made a positive preliminary anti-dumping ruling on Chinese decorative paper.
Colombia has imposed an additional 35% tariff on steel and metal machinery products from China and other countries for one year.
At the same time, the EU is accelerating the promotion of the “free trade circle” – the “EU-Mercosur Partnership Agreement” is expected to temporarily take effect on May 1, with zero tariffs on 91% of goods. Chinese goods will face greater competitive pressure in the South American market.
Amidst the turmoil, the RMB exchange rate has given foreign traders some comfort.
On April 13, the central parity rate was 1 US dollar = 6.8657 yuan, the onshore spot price was 6.8360, and the offshore price was 6.8354. It was generally stable with no big fluctuations.
For foreign trade companies that need settlement, exchange rate risks are controllable in the short term.
The sudden “cooling” of export data in March may be just a short-term fluctuation, or it may be a turning signal.
But what deserves more vigilance than the data are the drastic changes in the policy and trade environment: tax rebates are gone, supply chain compliance is stricter, and global tariff barriers are getting higher.
Next, foreign traders must do at least three things: recalculate costs, especially in the photovoltaic, battery, building materials, and e-cigarette industries. After the tax rebate is cancelled, the quotation must be adjusted immediately; keep an eye on the compliance red line. The new supply chain security regulations are not just a show-off, and cross-border business must comply as soon as possible; diversify market risks. The United States and the European Union are building walls. You might as well look more at Southeast Asia, the Middle East, and Latin America.
Finally, leave an interactive topic: Is your industry greatly affected by the export tax rebate adjustment?
Are the orders this year more or less than last year?
Welcome to chat in the comment area.
