China-Japan Export & Import Up 16.7% YOY in Aug 2016

According to China Customs statistics, during January-August 2016, China's export-import trade with Japan totaled RMB 1.14 trillion yuan, up 2.7% year-on-year (YOY), accounting for 7.4% of China's gross foreign-trade value. Therein, export to Japan reached 542.98 billion yuan, up 0.9% YOY; import from Japan reached 599.82 billion yuan, up 4.3% YOY; trade deficit was 56.84 billion yuan, an increase of 53.1% YOY. Japan was China's fifth largest trading partner, fifth largest export market and fourth largest import source.

1. Characteristics of China-Japan Trade in August 2016

(1) Monthly export-import value grew YOY for 4 consecutive months, with August having the first 2-digit growth since March 2012. See the chart below.

(2) Ordinary trade made up a bigger proportion, with more import and less export taken by Customs special control mode.

(3) Electro-mechanical products made up nearly 50% of the export, labor-intensive products increased faster in the export than overall performance.

(4) Substantial import growth referred to integrated circuits, automobiles, and automobile parts respectively.
See the table below.
 

2. Causes of China-Japan Trade Growing YOY Recently

(1) With RMB depreciating against Yen, China’s exports got more competitive in price.

(2) April earthquake-damaged capacity has recovered in Japan, allowing China to import integrated circuits and automobiles from Japan as many as before.

(3) China-Japan cooperation in cross-border e-commerce promoted bilateral trade growth. Recently cross-border e-commerce popularity in China has increased Chinese demands for Japan-made goods like cosmetics, milk powder and paper diaper.

3. Notable Problems

(1) As Japan’s 2nd-quarter economic data is unpleasant, its economic stimulus package is uncertain to prove effective.

(2) Kumamoto, Japan was hit by another earthquake, likely impacting the export of electronic products from there.