China’s Exports Rise in December, But What’s the Overall Trend for 2023?

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China’s Exports Rise in December, but Decline Overall for 2023

China’s exports showed a positive growth in December, surpassing expectations. However, the overall trend for 2023 revealed a decline, according to customs data released on Friday.

In December, exports increased by 2.3% year-on-year in U.S. dollar terms, exceeding the predicted 1.7% rise projected by a Reuters poll.

However, for the entirety of 2023, exports fell by 4.6%, while imports dropped by 5.5%, as reported by customs data.

In December, imports rose by 0.2% compared to the previous year in U.S. dollar terms. This figure was slightly lower than the 0.3% increase anticipated by analysts surveyed by Reuters.

The demand for Chinese goods has been affected by slower global growth, leading to a decrease in the country’s trade with its major partners throughout 2023.

China’s Trading Partners in 2023

The Association of Southeast Asian Nations (ASEAN) emerged as China’s largest trading partner within the region in 2023, followed by the European Union.

On an individual country basis, the United States remained China’s top trading partner.

In a positive development, Russia stood out as a bright spot in China’s trade data. China’s exports to Russia increased by nearly 47% in 2023, and imports from Russia rose by almost 13%.

According to Caixin, a Chinese media group, “Chinese manufacturers anticipate production to rise over the course of 2024 amid forecasts of firmer global demand, higher client spending, and new product investment.”

The December manufacturing purchasing managers’ index released by Caixin indicated a slight improvement from November. However, the level of optimism was lower than the series average.

The report also highlighted a decline in the employment sub-index, with companies opting not to replace voluntary leavers or reducing headcounts due to subdued demand.

Macquarie’s Chief China Economist Larry Hu stated in a report, “Our base case is for exports to rise 2% in 2024 after falling 5% in 2023. If exports slow down more than expected, policymakers would take more proactive measures with domestic policy supports.”

China’s Automotive Sector Shines

The automotive industry has been a positive aspect of China’s recent trade data. In 2023, China is expected to surpass Japan as the world’s largest exporter of cars.

The rapid growth of the electric car market and demand from Russia have contributed to the boost in China’s auto exports, as noted by Sarah Tan, an economist at Moody’s Analytics.

Tan mentioned, “After Russia’s invasion of Ukraine in February 2022, many auto manufacturers left the country, creating an opportunity for Chinese manufacturers to fill the gap. In the first eleven months of 2023, auto shipments to Russia increased about six times compared to 2022 in value terms.”

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