At the beginning of this year, the export engine, which was the main driving force of China’s economic recovery during the epidemic, showed weakness, making it more difficult for the government to revive the economy. China’s economy is still faltering, and the impact of the three-year strict dynamic zeroing policy still exists.
This trend is likely to continue. At present, the central banks of some developed economies such as the United States have released signals that they may continue to raise interest rates for a longer period of time to fight inflation. Demand for furniture, electronics, and other goods.
On Sunday, Chinese leaders set a growth target for gross domestic product (GDP) of around 5% this year, a relatively conservative target; China’s GDP growth rate last year was only 3%. The cautious outlook for growth this year reflects Beijing’s deep concern over weakening external demand, despite the lifting of dynamic zeroing restrictions and clear signs of life in the hard-hit real estate sector.
Robin Xing, chief China economist at Morgan Stanley, said that while the global economy appeared resilient so far this year, the prospect of weaker demand and China’s export growth this year would not be reversed. He predicts lower exports will weigh on overall growth.
Xing Ziqiang also believes that the drop in Chinese exports this year may start to erode some of the market share gained during the epidemic. Chinese leaders have prioritized securing factory production during the pandemic, allowing manufacturers to continue churning out goods and taking business from rivals in places like Southeast Asia.
After nearly three years of continuous growth since the beginning of 2020, China’s exports fell year-on-year for the first time in October last year. The first full month of .
China’s exports fell less than December’s 9.9 percent drop in January-February and were better than the 9 percent drop expected by economists polled by The Wall Street Journal. China usually releases export data for January and February together to eliminate the impact of the Lunar New Year factor.
Economists at Capital Economics said the better-than-expected export data likely reflected the impact of the lifting of coronavirus restrictions, with the resulting boost appearing to be a one-off. With overseas demand still subdued, China’s export outlook could deteriorate again, they said.
In addition, China’s imports from January to February fell by 10.2% year-on-year, a larger-than-expected decline, and higher than the 7.5% year-on-year decline in December last year and the 5.1% decline predicted by surveyed economists. This suggests that China’s reopening has not translated into increased infrastructure investment, at least for now.
As a result, China’s trade surplus ballooned to $116.88 billion, up from $78.01 billion in December.
Li Xingqian, a senior official at China’s Ministry of Commerce, said last month that China faces extremely severe challenges in foreign trade amid the risk of a global recession, slowing growth in overseas demand and tight global supply chains.
China is increasingly reliant on trade with its neighbors as demand from the West dries up, the data show.
According to Chinese customs data, China’s exports to Southeast Asia rose 9 percent year-on-year in January-February this year, while exports to the European Union and the United States (China’s second and third largest trading partners, respectively) fell by 12.2 percent and 21.8 percent, respectively. .
Part of the problem, exporters say, is that Western customers have been slow to come to China after COVID-19 restrictions were lifted. International flights are still scarce, and airfares are sometimes prohibitively expensive and visas are difficult to obtain.
A salesperson at Fuzhou Heva Shoes Co. said that despite the lifting of epidemic prevention measures, so far foreign customers have not flowed back and reconnected with exporters and producers in China. . The company primarily sells footwear to the US and European markets.
The saleswoman, who gave her surname only Yang, said she hoped to get out later this year to find new clients and reconnect with the rest of the world.
In Shantou, a city in southern China known for its toy production, Tony Chen, who runs a local sourcing company, said overseas demand remained fairly lackluster in February, partly because customers struggled to obtain visas to come to China.
The trade data released on Tuesday also suggested that the rest of Asia would have limited benefits from an improving Chinese economy.
South Korea’s exports, a bellwether for global trade, shrank for a fifth straight month in February, partly because demand from China remained weak. South Korea’s exports fell 7.5% year-on-year in February, although the drop was less severe than January’s 16.6%. South Korea’s semiconductor exports plunged 42.5% in February as global demand for electronics continued to slump.
Economists at Oxford Economics believe that China’s reopening has not provided much of a boost to import demand, as evidenced by weak export data from Southeast Asia and China’s other major trading partners. The research house expects exports from these Asian regions to weaken further in the coming months as the U.S. and Europe face the risk of recession in the first half of the year.