China’s export growth percentage is estimated to remain in the “low single digits” this year, with the possibility of a pickup in the second half, according to an outlook by Goldman Sachs that comes amid supply-chain disruptions and sluggish global demand. Andrew Tilton, Chief Asia Economist at the American investment bank, said that the global economy is “still rotating back to services to some extent”, rather than trade. “That’s a relatively soft outlook from China’s perspective. Right now it’s very weak,” he said at a media briefing in Hong Kong. “In the electronics and tech areas, people bought a lot of equipment during the pandemic, and so you have a sort of overhang.” China’s exports fell by 9.9% in December compared with a year earlier, while overall in 2022, exports rose by 7%. But Tilton expects there will be a pickup in demand for products, including smartphones, in the second half of the year, and he said this should aid in the recovery of the semiconductor supply chain. China’s trade figures for January and February will be released next month, with the data combined to smooth out the impact of the Lunar New Year holiday, which falls at different times during the two months in different years.
Paris-based Allianz Trade said in a report that China’s post-Covid reopening will help normalize the disrupted supply chains, but sluggish global demand implies that oversupply will continue this year. After a resilient performance in the first half of 2022, global trade deteriorated in the second half of last year and is likely to remain muted in 2023, the report said. Dwindling global demand amid sustained inflation is set to persist throughout this year, and trade growth will remain mild, the report added. “There has been an oversupply situation since the fourth quarter of 2022,” said Francoise Huang, Senior Economist for the Asia-Pacific region at Allianz Trade. “Ample supply and some stabilization in supply chains are likely to prevail this year on the back of weakening demand, replenished inventories, increased capital expenditure and normalizing shipping conditions.”
The international insurance company revised its forecast for global trade growth in 2023 from 0.7% to 0.9% with a “slight quarter-to-quarter contraction between the last quarter of 2022 and the second quarter of 2023”, before “a moderate recovery” in the third quarter, then a “firming up” by the end of the year, the South China Morning Post reports.
