The beginning of the year indicated a recovery in imports and exports in China. But the figures for March seem to nip the initial hopes in the bud.
China’s foreign trade fell again in March after signs of recovery at the beginning of the year and more positive signals from industry.
As the customs authority in Beijing announced, exports fell significantly by 7.5 percent compared to the same month last year to the equivalent of almost 280 billion US dollars (around 262.2 billion euros). According to the information, imports fell by 1.9 percent to around 221 billion US dollars. Analysts had expected the decline in exports to be smaller and even expected an increase in imports.
Trade with Germany weak
Trade with Germany also experienced a setback compared to March 2023. Exports fell by 12.4 percent in US dollar terms and imports by 13.7 percent. The same development was evident in Chinese foreign trade with the USA and the EU. When Chancellor Olaf Scholz (SPD) arrives in China this Sunday for his three-day visit, the topic of trade and economics is also likely to play an important role.
The German government coalition agreed on a China strategy last summer. It said, among other things, that the Federal Republic wants to reduce its dependencies on China in critical areas. Beijing, on the other hand, is critical of German efforts. Although Germany’s imports and exports to and from China have now fallen, many German companies operating in China are dependent on the Chinese market – such as the automobile industry.
Weakness of the Chinese economy as a risk
It is repeatedly pointed out that a weakness in the Chinese economy also brings risks for other countries. More recently, more positive signals from industry in the Middle Kingdom had given hope that the economic situation could improve further – the purchasing managers’ index for the manufacturing sector was pointing to expansion again after a long time. In addition, the foreign trade balance for January and February beat analysts’ expectations. The value of Chinese exports rose by 7.1 percent compared to the previous year to the equivalent of 528 billion US dollars (around 484 billion euros). Imports increased by 3.5 percent to around 125 billion US dollars.
In the entire first quarter, China’s imports and exports rose by 1.5 percent compared to the same period last year. When it came to trade with neighboring Russia, the statistics also showed a positive balance for this period with a 2.6 percent increase in exports and a 7.3 percent increase in imports.
Review of 2023 and growth target for 2024
Last year, the export-driven Chinese economy recorded a significant slump in exports, with a decline of 4.6 percent. In addition, the world’s second largest economy imported 5.5 percent less over the entire year. China’s government is targeting economic growth of around five percent in 2024.
Source: Stern
