World trade: China’s exports are surprisingly clear

Against the background of the uncertain location in world trade, China’s exports have surprisingly increased in March. As the Chinese customs authority announced, exports increased by 12.4 percent compared to the previous year. Economists had only expected between 4 and 5 percent.

In contrast, imports dropped by 4.3 percent. The surplus was thus around $ 102.6 billion (around 90 billion euros). China’s exports have proven resilience, said the Vice Minister of the customs authority, Wang Lingjun, in Beijing. In March, China exported 9.1 percent more than a year earlier to the USA, imports dropped by 9.5 percent.

Where does the export increase come from?

The figures for March and the first quarter depict foreign trade before the recent escalation in the trade war between Beijing and Washington. Some experts suspect that exporters have tried to carry out their goods before the drastic US volume increases. According to the ING-Bank analyst Lynn Song, it is likely that the trade between the USA and China will collapse from April. Until it is clear who in the end suffered more from a strong decline in trading, it could take months.

US President Donald Trump has imposed special tariffs from up to 145 percent on Chinese goods since the beginning of April. Its customs policy is intended to strengthen domestic production, which in practice should encounter considerable hurdles. In the meantime, Trump took important electronics products, such as iPhones, which mostly come from China. For all countries, except China, he also put certain tariffs on hold for 90 days – now there should be time to negotiate.

In turn, Beijing reacted to 125 percent with an increase in its tariffs to US imports. The US government abuse tariffs and Schade of the global economic order, said Wang. China urges the US side to correct its behavior and to solve trade disputes through dialogue at eye level. The People’s Republic continues to open and will maintain multilateralism, said Wang.

According to the government, China does not want to raise any further surcharges for the time being, even if Trump would further increase his tariffs. “Even if the United States continues to collect even higher tariffs, this is no longer economically sensible and becomes a joke in global economic history,” said the customs commission. Simply put, it no longer makes a difference how high the tariffs would be, since US products in China would be too expensive in export to find acceptance on the market.

So the trade with Germany was running

Trading with Germany fit the overall picture. China’s exports to the Federal Republic rose by 11.9 percent in March, and imports broke up by 6.5 percent. The foreign trade with the EU, which according to China is the most important trading partner, developed similarly with significantly increased exports (10.3 percent) and rapidly sunken imports (minus 7.5 percent).

German companies have long felt the weak consumption in China, which is reflected in the new decline in imports from Germany, said Oliver Oehms, managing board member of the German Chamber of Commerce (AHK) in northern China. “Now the escalation is added in global trade, which also clouds the prospects.”

According to Oehms, however, the immediate effects of the trade conflict are limited, since German companies have been relying on increased localization in China for years, i.e. for supply chains, production and research and development. According to AHK, Beijing must quickly get its announced measures to promote consumption. “Because a further increase in trade deficit towards Germany through a possible export boom of Chinese goods should not be an answer to the tense situation,” said Oehms.

What is China’s strategy?

The trade conflict is extremely inconceivable for the Chinese. In the second largest economy in the world, a weak demand is pressing on economic output. In addition, the exporting nation has to find alternative markets after the factual from the US market. According to experts, however, the problem could be that other countries or economic areas such as the EU themselves continue to raise the barricades if cheap Chinese products should flood their markets and thus endanger domestic industries.

Beijing could find buyers in Southeast Asia, for example. On his multi -day trip through Vietnam, Malaysia and Cambodia, China’s President Xi Jinping started at the start for more cooperation with Vietnam in industrial supply chains as well as artificial intelligence, renewable energies and 5G areas in which China produces leading technology.