Chinese exports plummet, except to Russia
July 13, 2023
Chinese exports experienced a significant decline in June compared to a year earlier, according to official data released on Thursday, putting pressure on Beijing to introduce more stimulus measures in order to revive the struggling recovery.
At the same time, China saw a significant rise in its two-way trade with Russia last month.
Tensions with US impacted exports
The decline in Chinese exports has been impacted by both weakened global consumer demand and tensions with the United States.
China reported a 12.4% drop in exports in June compared to June 2022, while imports also fell by 6.8% during the same period, reinforcing concerns about weakening domestic demand.
Overseas shipments play a crucial role in the growth of the world's second-largest economy, but with the exception of a brief rebound in March and April, they have been declining since October due to weak demand in key markets.
This has led to inflation plateauing and prompted the central bank to ease monetary policy, putting pressure on the yuan.
China's trade surplus reached $70.2 billion (€62.98 billion) in June, compared to $65.81 billion in May.
Demand for Chinese goods falling
The threat of recession in the United States and Europe has resulted in tepid demand for Chinese products.
Economist Zhiwei Zhang of Pinpoint Asset Management warned that weak economic data from developed countries would further strain Chinese exports in the coming months.
These latest figures add to a series of bleak indicators pointing to a loss of momentum in China's post-COVID recovery.
Premier Li Qiang has acknowledged the challenges in achieving the country's 5% growth target for the year and has suggested potential policy measures to boost demand and support the private sector. However, few concrete steps have been announced.
Zichun Huang of Capital Economics said the silver lining was that "the worst of the decline in foreign demand" is already in the past.
Trade with Russia highest since Ukraine war
Meanwhile, despite the overall decline, Beijing's two-way trade with Russia surged in June, reaching its highest level since the start of the Ukraine war.
Bilateral trade value reached $20.83 billion, driven by China's increased imports of discounted Russian oil, coal, and certain metals.
Chinese exports to Russia also experienced significant growth, mainly attributed to Chinese automakers filling the void left by Western companies exiting the Russian market.
Chinese President Xi Jinping recently pledged to continue strengthening the strategic partnership with Russia.
ss/sms (AP, AFP, Reuters)