China's imports and exports returned to growth in the first ten months of 2023, with exports in October falling and imports growth beating expectations. “In the first ten months of this year, total imports and exports grew 0.03% year-on-year to CNY34.32 trillion, with exports increasing 0.4% year-on-year and imports falling 0.5%. In October, China's exports dropped by 3.1% year-on-year to CNY1.97 trillion. The biggest highlight of the latest trade data was an unexpected surge in October's imports. During the month, total imports surged by 6.4% year-on-year to CNY1.57 trillion, according to the General Administration of Customs (GAC). In U.S. dollar terms, imports grew by 3%, beating a Reuters forecast of a 4.8% contraction and reversing a 6.2% fall in September.
"In October, as the overall price of China's export commodities continued to fall, overseas demand slowed down and last year's high base having a significant impact, exports fell more than expected,” Zhou Maohua, Economist at China Everbright Bank, told the Global Times, noting that policy tightening in advanced economies and weaker economic performances in Europe and the U.S. have exerted pressure on global trade. However, Zhou noted, there are also signs of resilience for China's exports sector, with exports of cars, equipment and advanced manufactured goods showing relatively strong performance both in terms of volume and value. The GAC data showed that in the first ten months, exports of mechanical and electrical products increased by 2.8% year-on-year to CNY11.43 trillion, accounting for nearly 60% of China's total exports. Meanwhile, car exports jumped by 88.5% year-on-year to CNY582.43 billion.
While exports evidently remain under pressure, an unexpectedly strong growth in imports in October underscored the steady recovery in China's domestic demand, which has become a top priority for Chinese policymakers in boosting high-quality growth and offers a growth spot for global businesses desperately seeking market opportunities amid worldwide downward pressure. Global confidence in China's economic prospects remain solid. International organizations such as the IMF also raised forecasts of China's economic growth citing “strong post-Covid recovery.” Economists noted that while challenges and risks linger, growing positive factors, especially supportive policy measures, will ensure stable growth. “Recent data of China's foreign trade are positive, but global demand is not what it used to be, so we do expect that there will be headwinds,” Gita Gopinath, First Deputy Managing Director of the IMF said. The IMF raised projections of China's GDP growth to 5.4% in 2023 and 4.6% in 2024, as reported by the Global Times.
