China’s exports increased 0.8% year-on-year in the first eight months in renminbi terms, despite lackluster overseas demand, rising protectionist pressures and intensifying geopolitical tensions. Experts expected exports to continue to face increased pressure as the global economy, weighed down by rising prices and spiking interest rates, appeared to be heading toward a recession. They called for stronger policy support to help foreign-trade firms better navigate mounting headwinds. In the January-August period, the country’s exports reached CNY15.47 trillion, while imports fell 1.3% from a year earlier to CNY11.61 trillion, resulting in a slight decrease of 0.1% in the total foreign trade value, according to the General Administration of Customs (GAC). Exports in August dipped 2.5% year-on-year, beating analysts’ expectations when compared with a 9.2% year-on-year plunge in July. In month-on-month terms, China’s exports grew 1.2% in August, reflecting short-term recovery momentum. The August performance on the export front suggests an overall improvement in the nation’s foreign trade activities, said Zhou Maohua, Analyst with China Everbright Bank.
In U.S. dollar terms, China’s exports fell by 8.8%, year-on-year, to USD284.9 billion in August, while imports fell by 7.3% last month to USD216.5 billion. China’s total trade surplus in August stood at USD68.4 billion, down from USD80.6 billion in July. China’s exports tumbled for the fourth consecutive month in August amid weak external demand and ongoing global supply chain upheaval.
Analysts pointed out that the yuan has depreciated against the surging dollar lately, which has helped stabilize China’s exports and improve its balance of payments to some extent as a result of the enhanced price competitiveness. China’s contribution to global trade in goods, as shown by WTO data, jumped from 12.7% in 2018 to 14.4% in 2022. China saw steady growth in exports of mechanical and electrical products in the first eight months of this year, rising 3.6% to CNY8.97 trillion and accounting for 58% of the country’s total exports. Automobile export, in particular, surged 104.4% year-on-year. Meanwhile, diversification of trading partners and a better export commodity basket will help alleviate the impact of shrinking orders from Europe and the United States. High-level free trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), with their benefits, including tariff reduction and speedy customs clearance, will be leveraged to explore potential opportunities.
Greater government support should be channeled toward the many private firms, which serve as an important anchor of China’s foreign trade, said Xu Yingming, Researcher at the Chinese Academy of International Trade and Economic Cooperation. Private enterprises saw imports and exports jump 6% year-on-year to CNY14.33 trillion in the January-August period. Their trade value represented 52.9% of the country’s total, up 3 percentage points from the same period last year.
Duan Weidong, General Manager of Huafon Microfibre, a Shanghai-based manufacturer of microfiber materials, said that a series of preferential policies, such as customs clearance facilitation and tariff concessions, has enabled the company to bring down costs and land new orders with Vietnamese customers. Going forward, as the global economic outlook is still likely to remain grim, the company, as well as its peers, expect the government to roll out more targeted support, such as export tax rebates and loans at lower interest rates, to help reduce their costs and increase their competitiveness, he added, as reported by the China Daily.
The Global Times further adds that in yuan-denominated terms, foreign trade fell 2.5% year-on-year to CNY3.59 trillion in August, but it grew 3.9% month-on-month. Last month, exports rose 1.2% month-on-month to reach CNY2.04 trillion, while imports rose 7.6% to reach CNY1.55 trillion. In the first eight months, foreign trade totaled CNY27.08 trillion, slightly down 0.1% year-on-year, but still at a relatively high level, according to the GAC. “The import and export figures were better than anticipated, since analysts had expected that foreign trade might further drop in August due to mounting external challenges.
The latest figures indicate an increasingly stable growth trend,” Huo Jianguo, Vice Chairman of the China Society for World Trade Organization Studies in Beijing, told the Global Times. ASEAN remained the largest trade partner of China, with bilateral trade up 1.6% year-on-year to total CNY4.11 trillion. China-U.S. bilateral trade dropped 8.7% year-on-year in the first eight months, narrowing 0.9 percentage points compared with the first seven months, according to China Customs. Trade with countries and regions participating in the Belt and Road Initiative (BRI) rose by 3.6% year-on-year to reach CNY12.62 trillion.
This overview is based on reports by the China Daily, the Global Times and the South China Morning Post.
