Goldman with the note:
Exports in three Asian economies of which trade data are released early (mainland China, Korea and Taiwan) rebounded 3.6% mom sa in August in nominal USD terms, each above respective consensus expectations. Sequential gains were led by a strong turnaround in non-tech exports, helped by robust demand globally, especially in DMs. Imports also gained above expectations to 2.3% mom sa and the trade balance moderated slightly.
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1. Exports in three Asian economies of which trade data are released early (mainland China, Korea and Taiwan) rebounded 3.6% mom sa in August in nominal USD terms, after sequential declines of 2.3% in the previous month (Exhibit 1). Their year-on-year growth re-accelerated to 26.9%, from 22.2% in the previous month. The figures were stronger than consensus expectations in each of the three economies, as was the case with June outcomes, with the largest upside surprise in China (Exhibit 2).
Combined exports from the three economies in level terms (representing about half of total regional exports of US$700bn per month) maintained an overall upward trend, notwithstanding recent spikes in Delta variant cases in their major trade partners.
2. Imports also recovered 2.3% mom sa, following a slightly sharper contraction of -3.5% in the previous month. In year-on-year terms, growth picked up to 36.1%, well above Bloomberg consensus expectations (Exhibit 1). Trade surplus for these three economies moderated slightly to US$63.5bn (vs. US$64.3bn in the previous month), but stayed above June levels.
3.Overall exports from Asia Pacific are likely to have rebounded as well, albeit at a relatively modest 1.7% mom sa in our estimation based on historical correlations between total regional exports and the early Asian exports data. Flash headline trade data from India and Vietnam suggest a positive, yet slightly weaker momentum, compared with those of mainland China, Korea and Taiwan. Likewise, the momentum for Asia Pacific imports is estimated to have recovered to +1.0% mom sa.
4. We estimate that the sequential recovery in headline exports was likely driven primarily by a sharp turnaround in export prices of all three economies. Export prices, based on high-frequency commodity prices, picked up to 11.4% year-on-year in our estimation, after a slight slowdown in the previous month. Our estimates suggest that export volumes increased by some 15% year-on-year, which is a moderation from July and yet still a robust performance.
5. Exports recovered broadly across destinations, with particularly robust momentum for DM-bound exports (Exhibit 3). Exports to Europe and Japan recorded the strongest momentum of 5.3% and 5.0% mom sa respectively, followed by exports to the US which increased 4.5%. Korea and Taiwan’s exports to mainland China slightly lagged, rising a relatively modest 1.1% but turning around from -1.9% in the previous month. Exports to all other destinations (mostly EM) rebounded to 4.2%.
6. Imports also gained broadly across most origins, except for those coming from Europe (Exhibit 4). Imports from the US and Japan rebounded to 2.2% and 4.6% mom sa respectively. Korea and Taiwan’s imports from mainland China rose sharply, by 10.6% ahead of September lunar holidays, whereas the three economies’ imports from EM rose 3.3%.
7. By major product groups, sequential gains were led by a strong turnaround in non-tech products to +4.7% mom sa, after a slightly narrower extent of contraction in the previous month (Exhibit 5). The momentum in non-tech products was particularly strong for China and Taiwan. Tech exports from the three economies also sustained a three-month row of gains, with chips and non-chip tech each rising 1% from last month.
China’s semiconductor exports recorded the strongest growth momentum of 5.3%, compared with sustained contraction in Taiwan’s semiconductor exports. Among other tech exports, Korea stood out at a 3.2% sequential gain.