Wen Qidong | August China Lighting Industry Export Bulletin: Chinese Manufacturing Fills Global Production Capacity Gap, Cumulative Exports Turn Positive for the First Time This Year

In August 2020, the export value of China's lighting industry reached USD 5.266 billion, a Year-on-year (YoY) increase of 21.71%, marking three consecutive months of double-digit growth since June. Among them, the export value of LED lighting products was USD 3.324 billion, up 19.57% Year-on-year (YoY), with four consecutive months of growth since May.

As shown in the chart, after hitting rock bottom in February 2020 due to the domestic epidemic, the overall lighting export showed a clear recovery trend starting from March. The decline continued to narrow over the three months from March to May, until achieving double-digit positive growth for three consecutive months from June to August.

2020年1-8月，中国照明全行业累计出口额为303.1亿美元，同比增长1.15%，全年首度实现正增长。其中，LED照明产品1-8月累计出口额为200.61亿美元，同比增长2.21%，亦是全年首度正增长。值得注意的是，LED光源价格延续了近两年的下行趋势，而随着今年荧光灯光源产品的价格上升，此消彼长的两者间甚至已出现了出口均价倒挂的情况。

According to data from the General Administration of Customs, China's goods trade Export value in August was 1.65 trillion yuan, a slight decrease from July's 1.69 trillion yuan month-on-month, but the Year-on-year (YoY) growth still reached 11.6%, achieving double-digit growth for two consecutive months; valued at US$235.3 billion, it increased by 9.5% Year-on-year (YoY), an increase of 2.3 percentage points compared to the previous month. From January to August, the cumulative total Export value of China's goods trade was 11.05 trillion yuan, with a Year-on-year (YoY) increase of 0.8%, marking the first cumulative growth this year; valued at US$1.57 trillion, it decreased by 2.3% Year-on-year (YoY), with the decline narrowing by 1.8 percentage points compared to the previous month. Lighting exports have continued to outperform the overall market since last month.

Overall, lighting exports in August saw a slight month-on-month decline compared to July, but thanks to the relentless efforts of lighting export enterprises, they still maintained a growth rate that exceeded expectations.

The reasons for the growth are analyzed as follows:

1. It reflects the essential resilience of lighting products in national socio-economic life, as well as China's continued stable hub position in global lighting manufacturing and supply chains;

2. The backlog of orders from the early stage has entered the late execution phase. However, major economies in Europe and America are under pressure to restart their economies, leading to a significant marginal improvement in external demand, with new orders gradually recovering.

3. The overseas epidemic situation remains severe, and exports of products related to epidemic prevention and the stay-at-home economy continue to surge. In particular, lighting products for epidemic prevention, such as scientific research and medical lamps and UV lamps, have continued to grow significantly. Exports in the first eight months reached US$260 million, a year-on-year (YoY) increase of 378%;

4. China is one of the few major economies that have comprehensively contained the epidemic, leading global resumption of work and production. The rapid recovery of Made in China has filled the overseas production capacity gap caused by the pandemic and temporarily replaced other countries' export shares. According to statistics, as of June this year, China accounted for 17.2% of the global export market, reaching a historical high.

Summary

While the current export situation is encouraging, uncertainty about its future remains. With the global pandemic threat still present, restoring the global flow of people and goods remains a long and difficult journey. In the short term, non-pandemic-related external demand orders continue to face pressure, except for those related to epidemic prevention and stay-at-home economy products with high growth rates.

Against the backdrop of a confirmed global economic downturn, escalating US-China trade friction, and undercurrents of de-Sinicization in the global supply chain, the lighting industry faces risks of spillover. In previous operational systems, supply chains prioritized efficiency and cost-effectiveness; however, overseas clients are likely to prioritize supply chain security in the future, making it inevitable that some orders will be diverted to manufacturing countries such as Mexico, Vietnam, and India.