China's foreign trade in goods reached a historical high of CNY20.1 trillion in the first half of 2023, up 2.1% year-on-year. The country's imports and exports reached CNY9.76 trillion in the first quarter and CNY10.34 trillion in the second quarter, both registering positive growth year-on-year. Imports and exports in the second quarter were 6% higher than in the first quarter. In the first half of 2023, imports and exports of China's private enterprises increased by 8.9% to CNY10.59 trillion, accounting for 52.7% of the country's total. Imports and exports of foreign-invested enterprises came to CNY6.16 trillion, accounting for 30.7%. In dollar terms, total foreign trade came in at USD2.92 trillion during the period, down 4.7% year-on-year.
China’s GDP grew by 6.3% in the second quarter of 2023, up from 4.5% in the first quarter, while growth for the first half of the year reached 5.5%. Fixed-asset investment rose by 3.8% in the first six months of 2023, year-on-year, while the jobless rate for the 16 to 24 age group hit a new high of 21.3% in June.
Total exports increased by 3.7% year-on-year to reach CNY11.46 trillion in the first six months. Exports of electro-mechanical products increased by 6.3% to CNY6.66 trillion, making up 58.2% of exports, 1.4 percentage points higher year-on-year. Of these, exports of electric vehicles, lithium batteries and solar cells increased by 61.6%, driving the overall export growth of 1.8 percentage points, according to the General Administration of Customs (GAC). Although China's imports slightly declined 0.1% year-on-year to reach CNY8.64 trillion, imports of bulk commodities increased rapidly by 17.1%. Of these, China imported 561 million tons of energy products including crude oil, natural gas and coal, up 33.2%. Imports of consumer goods increased by 6.6% to CNY974.84 billion, while imports of meat grew by 9.5% and edible aquatic products by 30%.
It is worth noting that China's trade with partners in emerging markets continued to rise in the first half of the year. Foreign trade with countries involved in the Belt and Road Initiative (BRI) grew by 9.8%, 7.7 percentage points faster than overall foreign trade, accounting for 34.3% of the total. During the same period, trade with the Association of Southeast Asian Nations (ASEAN), China's largest trading partner, came to CNY3.08 trillion, up by 5.4% year-on-year, accounting for 15.3% of total foreign trade. Trade with partner countries of the Regional Comprehensive Economic Partnership (RCEP) grew by 1.5%. Meanwhile, trade with Latin American countries increased by 7% and that with African countries by 10.5%.
China's trade with the EU grew by 1.9% to CNY2.75 trillion, accounting for 13.7% of China's foreign trade, while trade with the U.S. dropped 8.4%, accounting for 11.2% of the total. Exports to the European Union declined by 12.92% in June year-on-year, while shipments to the United States dropped for the 11th consecutive month, with the 23.73% decline in June being the sharpest fall since November. In contrast, exports to Russia in June increased by 90.93%, compared with the same month last year. With the fall in exports outpacing that of imports, China’s total trade surplus narrowed to USD70.62 billion in June from USD97.4 billion a year ago. But the goods trade balance in the second quarter still expanded to USD226.6 billion from USD203.4 billion in the first three months of the year.
China’s exports in June fell by 12.4% from a year earlier to USD285.32 billion, compared with a fall of 7.5% in May, the biggest year-on-year contraction since dropping by 17.7% in combined figures for January and February 2020. Export volumes also fell to a six-month low in June. “With the global downturn in goods demand continuing to weigh on exports, we think exports will decline further for now before bottoming out towards the end of the year,” said analysts at Capital Economics. In the first half of the year, China’s exports in U.S. dollar terms declined by 3.2% compared with the same period in 2022. China’s imports fell by 6.8% in June from a year earlier to USD214.7 billion, down from a fall of 4.5% in May. “This decline was largely driven by falling commodity prices as global supply shocks fade away. Indeed, in seasonally adjusted terms, we estimate that import volumes rose 4%, month-on-month, in June, up from 0.3% growth in May,” said Lloyd Chan, Senior Economist at Oxford Economics.
In the first half of 2023, foreign trade withstood external pressure and saw an improvement in quality. On the whole, the performance of foreign trade in the first half of the year was in line with expectations, Lü Daliang, Spokesperson for GAC, said at a press conference. Speaking of the growth rate in the foreign trade sector, Zhou Maohua, Macro Economist from China Everbright Bank, said that the global economic slowdown and China's high foreign trade base in 2022 have dragged down growth, though growth was already greater than expected. “Foreign trade has declined sharply in some surrounding economies, while China maintained expansion in the sector, fully showcasing China's resilience,” Zhou told the Global Times. Foreign trade is still expected to maintain moderate growth throughout the year, as the global economy is still expected to maintain a low rate of expansion, coupled with China's foreign trade resilience, said Zhou. Lü noted that at present, inflation in major developed economies is still at a high level, geopolitical conflicts are continuing and there is not enough short-term external demand to pick up momentum. China's foreign trade is still facing greater pressure for steady growth.
However, the fundamentals of China's economy are resilient and show great potential. With a series of policy measures continuing to take effect, we have the confidence, foundation and conditions to achieve the goal of promoting stability and improving the quality of imports and exports, the GAC Spokesperson stressed. “Throughout 2023, we are confident that we will continue to consolidate our market share and maintain China's position as the largest country in the global trade in goods,” said Lü.
China’s imports of integrated circuits (ICs) slumped 18.5% to 227.7 billion units in the first six months of 2023 from a year earlier by volume, according to new data released by China's General Administration of Customs. The total value of chip imports fell 22.4% to USD162.6 billion in the first half year of 2023. The drop was much deeper than the decline in China’s overall imports. The downward trend comes amid increasing efforts by the U.S. to restrict China’s access to advanced chips and related equipment, especially from Japan, South Korea and Taiwan, which are key players in the global chip supply chain. China’s total imports from South Korea plunged 19.6% in the period compared with a year ago, while imports from Japan and Taiwan fell 11.1% and 18.9% respectively.
This overview is based on reports by the China Daily, Global Times and South China Morning Post.
