Imports sustain China’s trade despite overall slowdown
The DHL Global Trade Barometer (GTB) indicates a further contraction in world trade for the next three months, with China recording the weakest growth outlook compared to all surveyed GTB countries. China’s ocean and air imports in certain sectors look set to remain strong as domestic consumption drives the economy amidst an overall decline in trade growth, according to data from the DHL Global Trade Barometer released by DHL, the world’s leading logistics company.
The DHL Global Trade Barometer, an early indicator of global trade developments calculated using artificial intelligence and big data, revealed that China’s trade index now stands at 42 points and therefore indicates negative growth for the three months ending in January 2020. With three points down from the previous quarter it’s the lowest result since the launch of the GTB in January 2018. Although China’s index value remains below 50 – the threshold for net trade growth – imports for important sectors like basic raw materials and chemicals & products via air freight and industrial raw materials and temperature or climate controlled goods via ocean freight remain strong, suggesting domestic consumption is responding positively to government stimulus policy.
“This quarter’s index indicates that China’s trade growth continues to decelerate, but also points to substantial strength in domestic demand that has made up as much as 60% of China’s economic growth this year,” said Steve Huang, CEO, DHL Global Forwarding Greater China. “Increases in air imports of raw materials and ocean exports of machinery parts should offer cause for optimism amongst major Chinese industries, coinciding with policy actions to upgrade national manufacturing capabilities in preparation for Industry 4.0-related demand. With economic growth still holding at 6% in Q3 2019, China’s economy appears to have enjoyed significant resilience even in the face of prolonged uncertain global trading conditions.”
Steady but mild decline negatively affects all countries, except India
The Barometer’s results also suggest that world trade is expected to continue at moderate pace but further contract for the next three months, driven by minor decreases in both air and containerised ocean trade. Against previous quarters this year, the downward trend in trade growth remains mostly stable, neither indicating an acceleration of the decline nor a bottoming out of contractionary movement. All seven nations monitored by the Barometer received indexes below 50 points except for India, where the Barometer forecasts moderate growth of five points to 54 points for India. While Japan and the UK had been the only countries with positive trade outlooks in the previous update in September, the two countries record the highest losses in this period.
“According to the DHL Global Trade Barometer the year will probably end with moderate world trade. However, we’ve to bear in mind where we come from: The rapid growth world trade has undergone in recent years was like climbing the Mount Everest. Now, we are on the descent, but we are still breathing altitude air”, Tim Scharwath, CEO of DHL Global Forwarding, Freight, says. “A countless number of stable trade relations continues to flourish worldwide, despite smouldering trade conflicts and geopolitical uncertainties.”
About the Global Trade Barometer
Launched in January 2018, the DHL Global Trade Barometer is an innovative and unique early indicator for the current state and future development of global trade. It is based on large amounts of logistics data that are evaluated with the help of artificial intelligence. The indicator is published four times a year and the next release date is scheduled for end of March 2020.