China’s Trade Outlook Declines as Air Drags

Trade tensions between the United States and China have many repercussions, according to the DHL Global Trade Barometer, an early indicator of global trade developments calculated using artificial intelligence and big data analytics.

China’s September 2019 trade outlook registered a four-point decline from June to an index value of 45, according to the DHL data. Mainly driven by a significant eight-point fall in overall air trade, the bright spots of growth in air imports appear set to carry the fall in exports.

China’s air imports of basic raw materials, machinery parts, chemicals and products, and temperature- or climate-controlled goods will be the biggest near-term contributor to trade growth, although challenges faced by air exports will negate that growth, the data suggests. September 2019’s ocean trade outlook remains unchanged from June’s index value of 47.

"The increase in air imports of raw materials and machinery parts is in line with China’s recent plans to move from high-speed to high-quality growth, concentrating on the adoption of artificial intelligence, smart manufacturing, and renewable energy to establish country-wide infrastructure projects," says Steve Huang, CEO, DHL Global Forwarding Greater China.

The data also suggests that world trade remains at a crossroads and will further lose momentum through November, albeit at a slower pace than the previous quarter. A drop in air trade alone triggers the current decline, while the global ocean trade outlook remains stable. All seven nations surveyed reveal indexes below 50 points except for Japan and the UK, where forecasts show positive growth momentum. In the Barometer methodology, an index value above 50 indicates positive growth, while values below 50 indicate contraction.

The trade conflict between China and the United States continues to simmer, resulting in an overall subdued trade mood. It is expected that U.S. trade will shrink further, remaining in negative territory with 45 points, despite having climbed one point since June.

Leave a Reply

Your email address will not be published. Required fields are marked *