China’s imports last month grew at their fastest pace in 10 years, fueled by surging demand for raw materials, although export growth slowed more than expected, weighed by disruptions caused by COVID-19 cases at the nation’s major southern ports.
While a brisk recovery in developed markets has bolstered demand for Chinese products, a global semiconductor shortage, higher raw material and freight costs, logistics bottlenecks and a strengthening yuan have dimmed the outlook for the world’s largest exporting nation.
China’s exports in US dollar terms grew 27.9 percent last month from a year earlier, slower than the 32.3 percent growth reported in April and missing analysts’ forecast of 32.1 percent.
Photo: Bloomberg
“Exports surprised a bit on the downside, maybe due to the COVID cases in Guangdong Province, which slowed down the turnover in Shenzhen and Guangzhou ports,” Pinpoint Asset Management Ltd chief economist Zhang Zhiwei (張智威) said, adding that turnover at ports in Guangdong is likely to remain slow this month.
Major shipping firms warned clients of worsening congestion at Shenzhen’s Yantian port in Guangdong Province after the discovery of several cases among port staff.
On the ground in Guangdong, factories have yet to report widespread capacity cuts over the outbreak, but admitted efficiency issues as they tried to meet overseas demand.
Chen Linsheng, chief operating officer at Anlan (安蘭), a Shenzhen-based manufacturer of skincare and beauty-care devices, said while there was no impact on production, staff are now subject to a series of COVID-19 tests and not allowed back into the factory without a negative result.
“We are not allowed going out [of the city]. We need to report in advance and cannot even go to Guangzhou or Foshan on our own,” Chen said, adding that a lot of meetings have moved back online.
Besides the impact of COVID-19 cases in Guangdong, the global chip shortage has started to hit all of China’s export items related to semiconductors, ING Bank NV chief economist for Greater China Iris Pang (彭藹嬈) said.
For example, auto processing products and parts, the biggest export item, fell 4 percent year-on-year, she said.
At the same time, the Chinese currency’s extended rally in the past few weeks to near three-year highs against the US dollar could further saddle US consumers with higher prices.
Imports increased 51.1 percent year-on-year last month in US dollar terms, the fastest growth since January 2011.
However, that figure — a gauge of import value, not volume — was partly flattered by hot raw materials prices with demand for commodities such as coal, steel, iron ore and copper driven by easing pandemic lockdowns in many countries and ample global liquidity.
Capital Economics Ltd senior China economist Julian Evans-Pritchard said while import prices increased at a rapid pace, import volume probably edged down last month.
“Once again, supply constraints are partly to blame – inbound shipments of semiconductors continued to drop back,” he said. “So too did imports of industrial metals.”
China posted a US$45.53 billion trade surplus for the month, wider than the US$42.86 billion surplus in April.
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
US actor Matthew McConaughey has filed recordings of his image and voice with US patent authorities to protect them from unauthorized usage by artificial intelligence (AI) platforms, a representative said earlier this week. Several video clips and audio recordings were registered by the commercial arm of the Just Keep Livin’ Foundation, a non-profit created by the Oscar-winning actor and his wife, Camila, according to the US Patent and Trademark Office database. Many artists are increasingly concerned about the uncontrolled use of their image via generative AI since the rollout of ChatGPT and other AI-powered tools. Several US states have adopted
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
RSS