GROWTH IN CHINESE EXPORTS: A NEW RECOVERY FOR THE MARKET?
Exports from China rose unexpectedly in March. This positive increase is mainly due to growing demand for electric vehicles, lithium batteries and solar-related products, but also to the easing of anti-pandemic measures in the same period, which freed up a number of orders placed in previous months.
March was a real boost for the Chinese economy, with exports up almost 15% on a year earlier, ending five months of decline and raising hopes among economists and investors. But analysts say the jump was more likely linked to the fulfilment of backlogged orders that had been held up by the pandemic in previous months, and warned that the outlook for global demand remains subdued. Zhiwei Zhang, chief economist at Pinpoint Asset Management, said: “After January and February, when factories were struggling because of COVID-19, we can finally say they are back to full capacity and have been able to clear all the orders received earlier.” Zhang stopped short of saying that Chinese exports have returned to pre-pandemic levels, but said March could certainly be a good springboard for a restart.
As for imports, the data show they fell less (1.4%) than expected (5%), with an acceleration in purchases of agricultural products, soybeans in particular, raising the standards seen so far. Imports of crude oil and iron ore also increased, offsetting the fall in copper imports.
While the export data look encouraging, Lv Daliang, spokesman for the General Administration of Customs, warned that conditions could worsen in future. “The external environment is still risky and complicated at the moment,” he said at a press conference, as reported by Reuters. “Weak external demand and geopolitical factors will bring greater challenges to China’s trade development.”
Even in the face of pressures and challenges, China’s foreign trade, with its clear resilience and vitality, is likely to achieve its 2023 goal of promoting stability and improving quality, helped by various stabilising measures. Beijing has set a GDP growth target of around 5% for this year, after last year’s strict pandemic controls pushed the economy to one of its lowest growth rates in decades.
