China's foreign trade recovery continued in the first half of 2022, with the country's total imports and exports expanding 9.4% year-on-year to CNY19.8 trillion, as part of a steady economic rebound supported by the government's policies to stabilize the economy while putting Covid-19 flare-ups under control through targeted measures. The country's exports surged 13.2% to CNY11.14 trillion and imports grew 4.8% to CNY8.66 trillion. Exports grew by 17.9% in June from a year earlier to USD331.3 billion, while imports grew by just 1% last month from a year earlier to USD233.3 billion. China’s total trade surplus rose to a record USD97.94 billion in June. Iris Pang, Chief Economist for Greater China at ING, expects China’s imports to grow faster and the export recovery to continue until the U.S. economy cools.
In the first half of 2022, China's trade with its top three trading partners – ASEAN, the EU, and the U.S. – expanded by 10.6%, 7.5%, and 11.7% from a year ago, respectively. China’s imports from the European Union fell by 9.7% to USD25 billion in June, while exports grew by 17.1% to USD50.5 billion.
China's trade with Belt and Road countries jumped 17.8% year-on-year. In the first half of the year, China's exports to the U.S. surged 14.8% to CNY1.88 trillion despite lingering tariff hikes and other restrictions, while imports of U.S. goods edged up 2.6% to CNY586.6 billion. In June, China's trade surplus with the U.S. widened by 26% from a year earlier to USD41.4 billion in dollar terms. The continued expansion of the U.S. deficit with China shows that it is wrong for the U.S. to use tariffs as a weapon to reduce its trade deficit, Gao Lingyun, Expert at the Chinese Academy of Social Sciences (CASS) in Beijing, told the Global Times.
China’s imports from Russia surged by 56.3% to USD9.7 billion in June, increasing for a fifth straight month since the invasion of Ukraine. Exports from China to Russia declined for a fourth straight month after dropping by 17% to USS5 billion. This led to China’s trade deficit with Russia expanding nearly 22 times from a year earlier, to USD4.7 billion.
China's exports of agricultural products increased by 21.7% to CNY303.1 billion in the first half of 2022, reflecting China's significant contribution to helping stabilize the global food market amid a series of challenges. Customs data showed that export values for aquatic products were up 14.9% to CNY72.52 billion, vegetable and edible mushrooms export value rose by 5.5% to CNY37.79 billion and canned food realized 55% growth to CNY13.75 billion.
General Administration of Customs' Spokesperson Li Kuiwen said the country's foreign trade showed a remarkable rebound in May and June, as foreign trade companies, especially those in the Yangtze River Delta region, resumed manufacturing and production in an orderly fashion after the country's Covid-19 resurgence was put under control and as policies for stabilizing growth are gradually starting to have an effect. “The sharp drop in international shipping freight costs over the last several weeks, along with the stable Chinese yuan, has also resulted in an increase in overseas orders to Chinese companies,” Bai Ming, Deputy Director of the International Market Research Institute at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times.
Transport costs from China to U.S. west coast fell to USD7,000 per standard container at the end of June from around USD13,000 in early February, ending a ten-month run of USD10,000, said a Shanghai-based shipping agent. A Shenzhen-based air conditioner exporter told the Global Times that more overseas orders arrived after shipping rates dropped sharply from mid-June. “Shipping freight costs for export orders are borne by overseas customers in most cases. High sea rates have prevented foreign customers from making orders. Now, export businesses began to recover.” In addition, the authorities have also ratcheted up support to help foreign trade companies navigate challenges amid rising external uncertainties and domestic Covid-19 flare-ups. The government issued a guideline in May to provide more financial and fiscal support for enterprises in the sector, which was followed by detailed policies from 27 government departments.
Looking forward, Bai forecast that the country's foreign trade is able to extend June's momentum to achieve double-digit growth in the second half of the year, if developed economies such as the U.S. and the EU manage to decelerate financial tightening and avoid a potential economic recession and thereby spark international demand. China's trade faces increasing uncertainties entering the second half of the year and the situation remains complex and grim, Shu Jueting, Spokesperson of the Ministry of Commerce (MOFCOM) said at a regular press briefing. She cited businesses' concerns over export prospects, as the global economic growth rate decelerates due to geopolitical tensions and some developed economies' sizable interest rate hikes. Despite the challenges, however, the long-term positive fundamentals in trade remain unchanged due to a solid foundation, Shu said.
