China's 4-Month Earnings Surpass Vietnam, Half of Saudi Arabia; Industrial "Monster" Rises with Caution Needed

China's foreign trade data for the first four months is quite impressive.

According to the latest data from the General Administration of Customs, in the first four months of this year, China's exports amounted to 7.67 trillion yuan, with a growth of 10.6%, and imports were 5.65 trillion yuan, with a growth of 0.02%. The trade surplus reached 2.02 trillion yuan, a year-on-year increase of 56.7%.

Looking solely at April, China's exports were 2.02 trillion yuan, a year-on-year increase of 16.8%, while imports were 1.41 trillion yuan, a year-on-year decrease of 0.8%.

The trade surplus soared to 618.44 billion yuan, a year-on-year increase of 96.5%.

What does this mean?

In recent years, Vietnam's annual Gross Domestic Product (GDP) has been just over 300 billion US dollars, and Saudi Arabia, known for its wealth, has an annual GDP of just over 800 billion US dollars.

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In the first four months of this year, China's trade surplus alone is equivalent to earning the GDP of one Vietnam or half of Saudi Arabia, which is quite astonishing.

Looking across the ocean at the United States, the fiscal balance in April was 176 billion US dollars, a drop of 43%, and there is a heated debate over raising the debt ceiling.

If the debt ceiling is not raised to borrow new money to repay old debts, the interest on the national debt will become unaffordable.

Perhaps, as Mr. Lu Xun said, human joys and sorrows do not communicate with each other.Last year, China had already set a record of $877.6 billion, and this year the trade surplus has expanded again.

At the current rate of the trade surplus's continuous expansion, it is not difficult to surpass a trillion for the whole year.

Such an exaggerated surplus, although essentially a good thing, we must also pay attention to the hidden concerns behind it; too much surplus can also lead to economic problems.

The industrial "monster" is showing its power.

A decade or so ago, the saying "800 million shirts for an airplane" was widely circulated.

It meant that we had to export a full 800 million shirts, and the profit from them was just enough to buy a Boeing airplane.

It can be imagined how big the gap between our country and developed countries was in terms of industry.

But times have changed, and now the products our country exports have undergone earth-shaking changes. The proportion of textiles such as clothing and socks is no longer as high as imagined.

From January to April this year, the export of mechanical and electrical products in our country increased by 10.5%, with an amount of 4.44 trillion yuan, accounting for 57.9% of the total export value, which is an absolute majority.

And the export of labor-intensive products was 1.31 trillion yuan, only accounting for 17.1% of the total export value.At the same time, China's import of mechanical and electrical products decreased by 14.4%, among which the import of integrated circuits fell by 21.1%, with a decrease of up to 724 billion yuan, and the import of automobiles decreased by 28.9%, with an amount of about 100.4 billion yuan.

Comparing the two sets of data, it is not difficult to find that the significant increase in the export of mechanical and electrical products and the decrease in imports are the decisive factors for the growth of trade surplus.

With the advantages of scale and efficiency in the supply chain, China, the largest "industrial monster" in human history, is exerting its power, and the era of "exchanging 800 million shirts for an airplane" has gone forever.

Take the automotive industry as an example, in the first four months, China's automobile exports increased by 120.3% year-on-year, and Chinese cars are queuing up in the ports waiting to be shipped abroad.

For more than 40 years, China has always been a deficit country in automobile trade, importing a large amount of foreign exchange for cars every year, doing a "loss-making business".

But since last year, Chinese cars have "turned losses into profits" and created a surplus of 380 billion yuan.

Looking at this year's trade situation, this number will inevitably increase further, and the slogan of "overtaking on the bend" once shouted by Chinese cars has now become a reality.

Of course, behind the dazzling foreign trade data, there are also hidden worries.

Like India, a trade deficit year after year will lead to huge economic problems, and too much surplus is also not good.

For the future foreign trade trend, we need to view it with vigilance and rationality, and some issues need to be resolved as soon as possible.Foreign trade data shines, but hidden worries need to be vigilant

The "Analects of Confucius" says "too much is as bad as too little," which is also true for a country's foreign trade.

A trade surplus that is too large essentially means exchanging our labor achievements for other people's currency. On one hand, it indicates insufficient domestic demand and weak consumption. People's confidence in consumption has not been significantly reversed and recovered, and they are still "afraid to spend."

Take the just-ended May Day holiday as an example. Although the number of trips and tourism revenue data are very eye-catching, the per capita consumption is not ideal.

Compared to the per capita consumption of 603 yuan in 2019, this year it is only 540 yuan, a decrease of 10%.

Therefore, from the actual situation, consumption is currently declining, domestic demand is insufficient, and confidence recovery still requires a process. A strong economic recovery still needs time.

On the other hand, looking at the external environment, the tense atmosphere between China and the United States and the soaring domestic economic risks in the United States at present. If we have too many US dollar foreign exchanges, it is not actually a good thing.

In case of a U.S. debt bomb or a financial crisis outbreak in the United States, and the dollar faces a credit crisis, the dollars we have earned hard will inevitably suffer value depreciation, which is a risk of loss of real gold and silver.

With the United States, the largest uncertain factor, China's foreign trade still has certain pressure and impact risks.

Furthermore, before the peripheral dollar risks have not yet landed, it is better to rely on oneself rather than others.Only when China's economic fundamentals recover and stimulate domestic consumption can they provide a sustainable development imagination, unblock the dual circulation of domestic and international markets, and make foreign trade data more pleasing and economic development more rapid.

In conclusion:

Recently, there have been many voices online claiming that "China's foreign trade has collapsed," with articles about "mountains of containers at ports" and "foreign trade factories reducing production, leading to massive worker layoffs" appearing frequently, causing widespread panic.

However, China's foreign trade performance in the first four months of this year undoubtedly slapped these people in the face.

Instead of worrying about a "cliff-like decline" in China's foreign trade, it would be better to pay more attention to the United States raising its debt ceiling, after all, they are so poor that they can't even repay their national debt.