After abruptly exiting from three years of coronavirus-related restrictions at the start of the year, China’s trade experienced a tumultuous recovery in 2023 due to geopolitical tensions, sluggish domestic demand and a global economic slowdown.
- China’s exports rose by 2.3 per cent in December compared to a year earlier, while imports rose by 0.2 per cent year on year last month
- World Bank predicts the global economy will see its worst half-decade of growth in 30 years between 2020 and 2024
China’s exports saw another modest uptick in December, underlining its fluctuating recovery in 2023 that could continue into the new year as a potential global slowdown threatens to weigh on trade throughout the next 12 months.
Imports, meanwhile, rose by 0.2 per cent last month from a year earlier to US$228.2 billion, bouncing back from a drop of 0.6 per cent in November but lower than the estimated 0.3 per cent increase.
“China’s exports of electric vehicles, lithium-ion batteries and solar cells hit record highs,” said Wang Lingjun, deputy head of the General Administration of Customs.
In December, China’s total trade surplus was US$75.3 billion, up from US$68.3 billion in November.
After abruptly exiting from three years of coronavirus-related restrictions at the start of the year, China’s trade experienced a tumultuous recovery in 2023 due to geopolitical tensions, sluggish domestic demand and a global economic slowdown.
Overall last year, China’s total trade declined by 5 per cent to US$5.94 trillion, year on year.
Looking ahead to 2024, the complexity, severity and uncertainty of the external environment is increasing
Exports in 2023 fell by 4.6 per cent to US$3.38 trillion, year on year, below Wind’s prediction for an increase of 1.8 per cent.
Imports declined by 5.5 per cent to US$2.56 trillion last year, below the expectation for an increase of 1.8 per cent.
“Looking ahead to 2024, the complexity, severity and uncertainty of the external environment is increasing. To further promote stable growth in foreign trade, some difficulties should be overcome and more effort is needed,” Wang added.
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- In terms of trade partners, China’s shipments to the United States declined by 6.89 per cent in December, year on year, having grown for the first time in 16 months in November.
- China’s exports to the Association of Southeast Asian Nations dropped by 6.14 per cent from a year earlier in December, up from a fall of 7.07 per cent in November.
The slow import growth reflects domestic demand remains challenging, and export orders may only pick up slowly in 2024
- “China’s exports show more signs of a rebound, but we should not be over-optimistic as a base effect is behind. The good news is the tech cycle will likely bottom out, as well as the exports of electronics,” said Gary Ng, a senior economist with Natixis Corporate and Investment Banking.
- “However, the competition in manufacturing will stay tough in the short-run with potential price cuts, which may bring deflationary pressure to the world.
- “The slow import growth reflects domestic demand remains challenging, and export orders may only pick up slowly in 2024.”
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On Tuesday, the World Bank said the global economy would see its worst half-decade of growth in 30 years between 2020 and 2024, with China’s economic slowdown one of the major risks.
Global trade growth in 2024 is expected to be only half the average in the decade before the pandemic,” the World Bank said in its Global Economic Prospects report.
The Washington-based international financial institution said feeble external demand would continue to weigh on China’s exports, and slower growth in domestic demand would also hold back its imports in 2024.
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