March exports slowed, imports increased. Does this mean a shift in the current growth momentum of domestic and external demand? Affected by high base numbers and the timing of the Spring Festival, the market had anticipated a decline in March exports, but the significant rise in imports still surprised the market. This directly led to a trade surplus that was nearly halved compared to the average monthly level of USD 100 billion since last year, which also exerted some drag on first-quarter economic growth. So, is the significant rebound in imports a trend shift or a short-term disturbance? After the slowdown in exports, what growth rate center will we return to?<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/1dac1ed1-3705-40dd-84bf-2385534a081a.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/1dac1ed1-3705-40dd-84bf-2385534a081a.jpeg"/> We believe that the significant rebound in March imports is influenced by the following factors:
First, technology products and processing trade remain important supports for imports. Among the categories with the highest import growth in March, integrated circuits, automatic data processing equipment, and high-tech products continued to perform well; at the same time, the import growth from South Korea in March significantly increased from about 30% at the beginning of the year. These reflect the recovery of the global technology industry, which has to some extent driven the rebound in the import activity of intermediate goods and technology components in China.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/6d783bb6-2e79-4591-96ef-f4aa38af1d59.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/6d783bb6-2e79-4591-96ef-f4aa38af1d59.jpeg"/>
Moreover, since the beginning of this year, the gap in import growth rates between processing trade and general trade has continued to widen, which also indirectly confirms that the recovery in imports related to intermediate goods and processing trade is more significant.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a873cd99-fbd6-4aa3-ad84-75708b07c8fc.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a873cd99-fbd6-4aa3-ad84-75708b07c8fc.jpeg"/>
Second, due to rising international commodity prices and disturbances in the Middle East, price factors have become an important driving force supporting the increase in imports. Not only have the prices of upstream commodities such as refined oil and copper ore significantly risen, but the price increase effects have also gradually transmitted downstream, with import costs for products like plastics, rubber, and integrated circuits rising to varying degrees. However, the destructive effect of import prices on downstream demand has not yet fully manifested. Although the import quantities of upstream crude oil and natural gas have decreased, the import quantities of downstream products such as copper materials, integrated circuits, and chemicals continue to show an upward trend, with the overall pull of quantity factors on imports still relatively weak compared to price factors.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/6306254f-1fa9-4f71-b822-496874c243df.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/6306254f-1fa9-4f71-b822-496874c243df.jpeg"/>
Finally, the increase in working days has also caused some short-term disturbances. Compared to the same period last year, March this year had one more working day (22 days), which also contributed to a certain increase in imports. After excluding the impact of working days, the average daily import growth rate in March was 22%, slightly down from January-February
Looking at exports, although the growth rate has marginally declined, there are still impressive aspects when excluding the base effect. From a seasonal perspective, the Spring Festival delays exports by about 1.08 percentage points year-on-year for each day it is postponed (compared to January-February). This year's Spring Festival was delayed by 19 days, and the year-on-year decline of 19.3 percentage points compared to January-February is basically in line with seasonal patterns; moreover, due to the impact of last year's rush for exports, the export scale in March still remained at a high level of 320 billion USD, which is quite remarkable. In addition, positive changes in external demand and structural shifts will continue to support the subsequent prosperity of exports:<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/d7ac88cb-e6e4-401c-af1f-2020a17447b6.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/d7ac88cb-e6e4-401c-af1f-2020a17447b6.jpeg"/>
Although the situation in the Middle East has short-term impacts on the global economy, the global manufacturing sector remains relatively robust. In March, the manufacturing PMI of major global economies such as Europe and the United States even showed signs of recovery, and exports from South Korea and Vietnam also rose significantly. This signal highlights the market's proactive inventory replenishment characteristics in response to supply chain uncertainties, and it also indicates that the demand side still possesses a certain degree of resilience in the short term. <img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/f2230761-a6eb-432a-bd63-0d6ebdb5f1bc.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/f2230761-a6eb-432a-bd63-0d6ebdb5f1bc.jpeg"/>
Furthermore, under geopolitical influences, China's supply chain advantages are once again highlighted, facilitating the structural shift of products such as new energy to emerging markets. Since last year, China's market expansion efforts in emerging markets have been significant, with exports to regions such as Africa, Latin America, and ASEAN continuing to grow rapidly, becoming an important new driving force for foreign trade exports. Although overall exports in March have slowed down, this structural support continues to manifest.
In the current environment where global production and supply chains are disrupted, China's complete industrial chain and energy independence advantages will be further strengthened, thereby attracting more order transfers. Exports of integrated circuits, automobiles, ships, and &#34;new three types&#34; of products are expected to continue to maintain high growth momentum. <img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/d18e08e7-319e-4556-9e4b-a24750dc0961.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/d18e08e7-319e-4556-9e4b-a24750dc0961.jpeg"/>
In summary, we believe that looking ahead to the second quarter, although the overall growth rate of exports will decline compared to the beginning of the year, as seasonal factors stabilize, it is expected to return to around a 5% growth center. Imports, on the other hand, still face disturbances in the short term, and the foundation for a sustained recovery is not solid, with a downward trend expected subsequently. With the gradual recovery of the trade surplus, net exports remain an important support for economic growth this year.
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The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk

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March foreign trade data shows that despite a slowdown in exports, imports have surged significantly, leading to a notable decrease in the trade surplus. The growth in imports is primarily supported by technology products and processing trade, particularly with outstanding performance in integrated circuits and automatic data processing equipment. Additionally, rising international commodity prices and the situation in the Middle East have also driven up import costs. An increase in working days has also had a short-term impact on import data. Overall, the rebound in imports may be a combination of short-term disturbances and a trend shift

March Foreign Trade: What’s Behind the Surge in Imports?