Experts say that the appreciation of the renminbi has accelerated the decline in export growth

Abstract On June 10, according to data released by the General Administration of Customs, the total value of China's imports and exports in the first five months of this year was US$140.79 billion, an increase of 27.4% over the same period last year. The accumulated trade surplus was US$22.97 billion, a decrease of 35.1%. The trade surplus continues...

On June 10, according to data released by the General Administration of Customs, the total value of China's imports and exports in the first five months of this year was US$140.79 billion, an increase of 27.4% over the same period last year. The accumulated trade surplus was US$22.97 billion, a decrease of 35.1%. The trade surplus continues to decrease.

And from the specific data, in May of that month, China's total import and export value of 301.27 billion US dollars, an increase of 23.5%. Of this total, exports were US$157.16 billion, up 19.4%; imports were US$144.11 billion, up 28.4%. The trade surplus for the month was $13.05 billion.

Data show that in April, China's total import and export value was 299.95 billion US dollars, an increase of 25.9%. Of this total, exports were US$155.69 billion, up 29.9%; imports were US$144.26 billion, up 21.8%. The trade surplus for the month was 11.43 billion US dollars.

Hu Yanni, a macroeconomic analyst at CITIC Jiantou, believes that the rapid appreciation of the renminbi has accelerated the decline in export growth. Moreover, the US economic recovery is not as good as expected. Although the possibility of a new round of quantitative easing is unlikely, the previous quantitative easing policy will continue. Therefore, in the short term, the RMB exchange rate against the US dollar may appreciate rapidly. The appreciation of the renminbi has a greater impact on exports.

Recently, the US economic data is weak, the US dollar index has fallen, and the RMB has strengthened. On June 8, the central parity of the RMB against the US dollar closed at 6.4795, marking a new high for the second consecutive trading day. However, it has fallen slightly in the past two days. The latest data shows that the central parity of the RMB against the US dollar is reported at 6.4853.

For domestic small and medium-sized export enterprises, under the weight of rising raw material costs and rising labor costs, the continuous appreciation of the RMB against the US dollar has become an unbearable burden.

However, from the perspective of the international environment, the recent economic recovery in developed countries in Europe and America is still good. The European debt crisis has not formed a substantial secondary shock. Although emerging countries such as ASEAN have higher inflationary pressures, the economy has not seen a significant slowdown. The environment has not deteriorated significantly.

In addition, although the export growth rate in May dropped sharply, the trade surplus in May was 13.05 billion US dollars, which was greater than the surplus of 11.4 billion US dollars in April, which was the highest in 2011 and showed a strong rebound.

Industry insiders said that the deficit in the first quarter is only a short-lived one, and the trade surplus may remain at a high level in the next few months due to the continuation of domestic austerity policies. Under this circumstance, the market expects to accelerate the appreciation of the renminbi.

Although the international market experienced a collective correction of commodity prices in May, China's import growth rate and total import volatility in May were limited, indicating that China's import demand is still relatively strong. In May, China’s imports increased by 28.4% year-on-year, which was higher than the 21.8% increase in April.  

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