CITIC Securities: Two factors support the continued strength of exports

CITIC Securities pointed out that in May, exports increased by 19.4% year-on-year, and the monthly export volume reached a historic high. The core driving force behind the significant increase in exports exceeding expectations is "steady prices and stable quantity". Against the background of high oil prices driving the re-pricing of global inflation expectations, China's exports are gradually shifting from "exchanging quantity for price" to "price complementing quantity". The AI industry chain is experiencing steady price increases; while rare earths, mobile phones, refined oil, and fertilizers are experiencing decreases in price and quantity. Aluminum prices and quantities are rising in parallel, while the decline in price and quantity of labor-intensive products such as shoes and bags has narrowed. The automotive industry is exchanging price for quantity. CITIC Securities maintains a judgment that future exports will continue to be strong, with two supporting factors: first, China is taking advantage of its energy cost advantage to undertake more "passive substitutional" transfer orders, and the trend of "stable prices and stable quantity" of export products is expected to further spread, leading to a simultaneous improvement in export enterprise profit margins and export volumes. Second, if China and the United States reach a symmetrical reduction in tariffs in the future, non-sensitive goods such as shoes, hats, and household items will benefit.