China Underground > China Finance > China’s Exports in December: Slight Uptick in a Challenging Economic Climate

China’s Exports in December: Slight Uptick in a Challenging Economic Climate

Last Updated on 2024/01/12

China’s exports witnessed a modest growth of 2.3% in December 2023, reaching $303.6 billion, as reported by customs data on Friday. This increase, marking a second consecutive month of growth, slightly exceeded market expectations which had forecasted a 1.7% rise. November had seen a smaller increase of 0.5%. Imports also showed a marginal rise of 0.2%, amounting to $228.2 billion, although this was below the anticipated figures, reflecting the fragile state of China’s domestic economic recovery.

The overall trade surplus for December stood at $75.3 billion, a significant 10% increase from November’s figure of $68.3 billion. This development comes as a positive sign amid the broader context of China’s economic landscape which has been battling deflationary pressures and a complex global economic environment.

Consumer prices in China, however, continued their downward trajectory, decreasing by 0.3% in December. This marks the third consecutive month of decline, signaling persistent deflationary trends within the economy. Additionally, the producer price index, an indicator of the prices at which factories sell their products to wholesalers, fell by 2.7% in December. This continuous drop for the 15th straight month further underscores the challenges faced by the manufacturing sector.

Analysts point to several external and internal factors influencing these trends. A global economic slowdown is expected to temper external demand for Chinese goods. Domestically, China grapples with sustaining economic growth amidst a property sector crisis and deflationary risks. Trade barriers and a potential global recession are also looming concerns affecting China’s export outlook for 2024. The economic downturn in major trading partners like the United States adds to the complexity, exerting additional pressure on China’s export capabilities.

Despite these challenges, specific sectors within China’s economy showed remarkable resilience and growth. Notably, exports in the new energy sector, including electric vehicles, lithium-ion batteries, and solar cells, have been robust, recording a significant year-on-year increase of 29.9% in 2023. This surge highlights the potential of these industries as key drivers of economic growth moving forward.

Trade dynamics have also shifted over the past year. China’s trade with its largest partner, the Association of Southeast Asian Nations, declined by 5% in 2023. Trade with the European Union, another major partner, saw a 10.2% decrease. In contrast, trade with Russia marked a significant uptick, with exports and imports growing by 46.9% and 12.7% respectively.

Sources: Apnews, Reuters
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