August 27, 2024 (InvestinChina.asia)- – Hua Chuang Securities’ chief macro analyst Zhang Yu suggests that China’s export data could play a crucial role in triggering new rounds of stimulus expectations. Here’s a breakdown of the key points and analysis.
Core Viewpoints
1. Economic State and Export Significance
- Weak Household Net Worth: A decline in household net worth is impacting corporate earnings negatively.
- Fiscal Support Shortfall: Fiscal support is insufficient, leaving exports as a key driver of economic stability.
- Export Volatility: Fluctuations in export growth rates could trigger renewed stimulus measures for economic stabilization.
2. Timing of Stimulus Triggers
- Q4 Pressure: Q4 could see heightened export volatility due to base effects and external demand factors.
- Trigger Period: This could lead to a critical period for stimulus expectation and market speculation around Q4.
Analysis
Export as a Key Trigger
- Macroeconomic Context: Weak household net worth and limited fiscal support mean that export growth fluctuations could prompt new stimulus measures.
Timing of Triggers
- Q4 Challenges: Base effects and weakening external demand suggest that Q4 could see significant export volatility, leading to shifts in stimulus expectations.
Four Perspectives
1. Total Demand Perspective
- External Demand Cooling: Global manufacturing PMIs indicate cooling external demand, likely exacerbating export pressure in Q4, particularly in November and December.
2. Commodity Perspective
- Electronics Support: Consumer electronics shipments could sustain export resilience until the end of Q3, indicating greater risk in Q4.
3. Base Effect Perspective
- High Bases: High bases in September, November, and December could result in lower year-over-year growth rates, increasing the risk of export deceleration.
4. Risk Perspective
- US Election Uncertainty: The US election outcome in Q4 could eliminate a significant uncertainty factor, potentially triggering stimulus expectations.
Conclusion
Zhang Yu’s analysis highlights the potential for export data to act as a catalyst for new stimulus expectations. With Q4 presenting significant challenges, stakeholders are likely to monitor export trends closely, anticipating possible stimulus responses to mitigate economic pressures.