China – the trade surplus, the CNY and autos
Two things. First, my latest video, discussing what's not surprising about the trade surplus (the rise in capital goods), and what is (that for exports China's global market share gains have accelerated, while for imports, they've fallen). Second, an interactive dashboard on China's auto exports.
In the context of the region, the fact that China's capital goods exports are rising really isn't a surprise. Where China does stand out is that this export transition is being accompanied by 1) a rise – indeed an acceleration – in overall export market share, and 2) a slowing of imports. While some of this is due to industrial policy, I think another important driver is the cheapness of the CNY, which the latest BIS data overnight show in real terms is now almost 20% lower than early 2022, and the cheapest since 2012. Subscribers can read more about these issues in this note from June.
On a related subject, this is a dashboard I – well, my data and ChatGPT – have built where you can track in detail the geographical progress of China's auto exports. I have plans to add more data – let me know if there are additions you would like to see.
Paul Cavey