Beijing, China – China’s economic resilience shines through its latest trade data, showcasing stronger-than-expected exports in the first two months of the year. Despite challenges such as subdued overseas demand and geopolitical tensions, the world’s second-largest economy reported a 7.1% increase in exports, reaching $528 billion in combined figures for January and February, according to customs data released recently.
This surpasses the 3.9% growth predicted by Chinese financial data provider Wind and also exceeds the 2.3% rise seen in December. On the other hand, imports rose by 3.5% year on year, outperforming market expectations of a 0.7% decrease. These combined trade figures for the two months aim to mitigate the impact of the Lunar New Year holiday, which falls at varying times each year.
Gary Ng, a senior economist at Natixis Corporate and Investment Banking, attributes China’s export success to the global tech cycle recovery and lower destock pressure. However, concerns linger over weak imports, reflecting ongoing challenges in domestic demand. Ng predicts a potential rebound in China’s exports by 4% and imports by 3.2% in 2024.
The impressive rebound in exports can be partly attributed to the low base of the same period last year, marked by a significant decline in exports by 6.8% and imports by 10.2% due to the impact of the coronavirus. As China tackles economic obstacles like a property market downturn, mounting local government debts, deflationary risks, and geopolitical tensions, both overseas investors and the domestic private sector face dwindling confidence.
The trade figures also highlight China’s trade relationships with various regions. While exports to Russia saw a resilient 12.5% growth, shipments to the Association of Southeast Asian Nations surged by 6%, contrasting with a 1.3% decline in exports to the European Union. Notably, exports to the United States spiked by 5%, while imports recorded a notable drop of 9.7% year on year.
China’s total trade surplus for the first two months of the year reached $125.1 billion, a significant increase from $103.8 billion during the same period last year. Premier Li Qiang, in his recent government work report, reaffirmed a GDP growth target of around 5% for 2024, focusing on bolstering the trade sector through various initiatives such as increased loan assistance for trade firms and support for cross-border e-commerce enterprises.
Amidst the economic challenges, Minister of Commerce Wang Wentao remains optimistic about the potential for both imports and exports, citing China’s evolving export commodities and the country’s proactive stance on opening up new market opportunities. With rapid growth in China’s “new three” exports – electric vehicles, lithium-ion batteries, and solar panels – the nation stands poised to leverage these sectors for further economic growth.