Export prices edge up for first time in two years
China’s export prices have increased for the first time in two years.
Per customs bureau (GAC) data, in June, export prices rose 0.5% y/y, snapping a prolonged 25-month contraction streak.
Some context: Plagued by overcapacity, China’s industrial sector has slashed prices and dumped surplus production on the international market, infuriating trade partners.
- Average export prices have fallen ~13% since 2022, with far deeper price cuts in sectors where overcapacity is particularly prevalent – like solar panels and autos.
June’s uptick in export prices came off the back of industrial machinery and equipment. Prices for:
- Metalworking machinery jumped 8.9% y/y
- Electrical machinery rose 5.5%
- Industrial equipment increased 2.9%
Prices for lower-value manufactured goods also ticked up. Prices for:
- Furniture shot up 7% y/y
- Toys, games, and sports equipment climbed 3.7%
- Footwear rose 3.6%
Get smart: After more than two years of relentless price cuts, even modest export price gains will help shore up industrial profits and take some heat out of trade tensions over cheap Chinese goods.
- That said, export prices are at multi-year lows, meaning part of June’s price increase reflects base effects, rather than a genuine improvement in pricing power.
Our take: Facing the threat of tariffs and other trade restrictions, exporters will cut prices further in the coming months to maintain competitiveness.
- That means June’s price increase will be an outlier, rather than representing a genuine bottoming out of export prices.
