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China to remain as major contributor to global trade growth in 2022: expert
Last Updated: 2021-07-12 07:37 | Xinhua
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China will continue to be a major contributor to global trade growth in the year ahead thanks to continued strength in China's domestic demand and import demand driven by robust export orders, said an expert with investment research firm MRB Partners.
 
"It is clear that China will continue to provide solid support for the global economic expansion for the foreseeable future, driven primarily by consumption," said Mehran Nakhjavani, partner of emerging markets with MRB Partners, in a recent research note.
 
Purchasing Managers' Indexes (PMI), MRB's self-developed economic activity indicator and alternative indicator on electricity consumption, rail cargo volume and bank lending suggested Chinese economic spurt has broadly peaked, according to Nakhjavani.
 
Chinese retail sales of various flavors have all peaked and are rolling over, while still expanding at a rate faster than that experienced prior to the pandemic, noted Nakhjavani.
 
The return to "normal" consumption levels is underpinned by the elimination of food price inflation, which has acted as a material headwind to discretionary spending, given that food comprises a large weight in the household consumption basket, said Nakhjavani.
 
China's overall retail sales in May were 9.3 percent higher than two years ago, with online sales up 32 percent and auto sales growing 15 percent from that in the same period of 2019, according to statistics with National Bureau of Statistics of China.
 
The real performance of Chinese foreign trade is consistent with a return to the norm prior to the twin disruptions of the U.S.-led tariff war and the coronavirus pandemic, said Nakhjavani, adding that trade data continue to be obscured by base effects and the depreciation of the U.S. dollar over the past year.
 
"The PMI for manufacturing export orders remains in expansionary territory and close to a six-month high, which is an encouraging sign for global trade," said Nakhjavani.
 
The volume index measuring containerized shipping exports has also pulled back from its peak, and is expanding at a steady pace consistent with pre-pandemic normality, he said.
 
If there were no logistic bottlenecks which have sent the cost of such containers soaring, the throughput in Chinese ports would have been more robust, added Nakhjavani.
 
MRB Partners continues to overweight Chinese stocks within an emerging market equity portfolio as the impact of recalibrated earnings expectations on mega-cap stocks will fade and underlying economic momentum will ensure steady earnings growth support for Chinese stocks. 
 

(Editor:Wang Su)

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China to remain as major contributor to global trade growth in 2022: expert
Source:Xinhua | 2021-07-12 07:37
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