A container placed at Yangshan Port in Shanghai, China on August 6, 2019.
Ally Song | Reuters
Imports in December increased by 0.2% year-on-year in US dollar terms. This was slightly below the 0.3% increase expected by analysts polled by Reuters.
However, exports fell by 4.6% in 2023, the first annual decline since a 7.7% decline in 2016, according to Wind Information.
Last year’s imports decreased by 5.5%. The last time there was a decline was in 2020, when the coronavirus pandemic began.
Trade between China and major partner countries decreased in 2023 as demand for Chinese products decreased due to the global economic slowdown.
By 2023, the Association of Southeast Asian Nations will be China’s largest trading partner on a regional basis, followed by the European Union.
On a country-by-country basis, the United States remained China’s largest trading partner.
Russia was a rare bright spot, with China’s exports to Russia increasing by nearly 47% in 2023, and imports increasing by nearly 13%.
Caixin said in its December Manufacturing Purchasing Managers Index that “China’s manufacturing industry is expected to see production declines through 2024 amid expectations of strong global demand, increased customer spending, and investment in new products.” We expect it to increase.”
The index showed gradual improvement from November. “However, optimism has waned since November and remains below the series average.”
The report also noted a decline in the employment sub-index. “We often talked about how companies chose not to replace voluntary redundancies or cut staff because demand was more subdued than expected,” Caixin said.
“In our base case, exports will decline by 5% before increasing by 2% in 2024.” [in 2023]. “If exports slow more than expected, policymakers will be more aggressive in supporting domestic policy,” Macquarie’s chief China economist Larry Hu said in a Jan. 5 report. Ta.
China’s economy has recovered from the pandemic more slowly than expected, but 2023 is likely to end with growth of around 5%. The Office for National Statistics is expected to release official GDP figures on Wednesday.
“Weak domestic demand is driving China’s competitive companies to expand into global markets, which in turn is driving their expansion into other parts of the world,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note. “This has contributed to curbing inflation,” he said.
“However, exports as a pillar of China’s growth are not strong enough to boost overall domestic demand,” he said. “Support through expanded fiscal policy is critical.”
China, the world’s largest oil importer, announced a 7.7% decline in crude oil demand in 2023. However, the decline was smaller than the 8.1% decline in November.
Imports of integrated circuits also increased in December.
China’s exports in 2023 declined in most product categories, with the few exceptions being machinery, ships, and home appliances.
Automobiles remain a bright spot, with exports increasing 69% in 2023 from the previous year, according to Chinese customs data. This was a slightly slower pace than the 70.9% increase from January to November 2023.
China is expected to surpass Japan as the world’s largest automobile exporter in 2023.
Sarah Tan, an economist at Moody’s Analytics, said the rapid growth of the electric vehicle market and demand from Russia are boosting China’s car exports.
“After Russia invaded Ukraine in February 2022, many automakers left Ukraine, and the void has only been filled by Chinese manufacturers,” she said in an email. “In the first 11 months of 2023, car shipments to Russia increased by about six times compared to 2022 in value terms.”