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Economy: China’s foreign trade is losing momentum

Economy: China’s foreign trade is losing momentum

The Chinese economy got off to a good start in the year. But according to other economic data, the trade figures for April are also modest. Is the upswing faltering?

After a good start to the year, the Chinese economy is in danger of faltering: According to the customs authorities in Beijing, Chinese exports rose by 8.5 percent year-on-year in April to USD 295.4 billion (around EUR 269 billion) . However, the growth was lower than in the previous month, when an increase of 14.8 percent was recorded. Imports went down in April, down 7.9 percent year-on-year.

Chinese exports to Germany rose 2.5 percent in April, while Chinese imports from Germany fell 5.7 percent. China’s exports to the US fell 6.5 percent and imports fell 3.7 percent.

Jens Hildebrandt, executive board member of the German Chamber of Commerce (AHK) in Beijing, commented on the trade figures that the increase in exports in April will give the Chinese economy a further boost to its recovery course. “Concerns about the weakening of the domestic market, which is reflected in negative import growth.” On the whole, however, local German companies were confident about the second half of the year.

China is aiming for an economic upswing this year after the end of the strict corona policy. So far this has worked. In the first quarter, the world’s second largest economy grew surprisingly strongly by 4.5 percent compared to the same period last year. For the year as a whole, management has set a growth target of around five percent.

Weak global demand weighs

The International Monetary Fund (IMF) expects economic growth of 5.2 percent in China this year. He expects growth in the People’s Republic to slow down in the medium term. According to the IMF in April, this will probably shift from capital goods to consumption.

China’s economy is now sending increasingly mixed signals. Even before the trading figures on Tuesday, the official purchasing managers’ index, which is considered an important economic indicator, had disappointed at the beginning of the month. Experts attribute the cooled mood in Chinese industry primarily to the generally weak global demand. This now threatens to slow down the country’s economic recovery after the end of the draconian corona measures. It was only at the beginning of December that Beijing reversed and lifted most of the pandemic measures.

If the weakness persists, Beijing would have to counteract this with further economic stimulus measures. A robust upswing would also help Germany, which has strong economic ties with the People’s Republic, particularly in the auto industry.

Tourism picks up again

However, there have also been positive surprises lately. During the May holidays in China, for example, it became apparent that Chinese tourism is doing better than before the pandemic. As the Ministry of Culture and Tourism announced last week, around 274 million trips were made during the holidays. That is 70 percent more than in the previous year and around a fifth more than before the pandemic.

Chinese foreign trade weakened noticeably last year due to the strict corona measures and lower demand for “Made in China”. After the end of the zero Covid strategy with its highly restrictive measures in December, a violent corona wave initially paralyzed the Chinese economy, which only recently picked up again. The economic planners are now mainly hoping that consumers will spend more money again.

Source: Stern

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