Containers are stacked high at the Yangshan Port in Shanghai, China, as shown in this August 6, 2019 photo.
Aly Song | Reuters
China saw higher than expected export growth in December, but it wasn’t enough to overcome an overall decline in 2023, according to customs data released on Friday.
Last month, exports rose by 2.3% year on year in U.S. dollar terms, surpassing the 1.7% increase forecast by a Reuters poll.
For 2023, exports fell 4.6% while imports dropped 5.5%, according to the data.
Imports only rose by 0.2% in December from a year earlier in U.S. dollar terms, slightly less than the 0.3% increase expected by analysts polled by Reuters.
Demand for Chinese goods has decreased with slower global growth, leading to a decline in the country’s trade with its major partners in 2023.
In 2023, the Association of Southeast Asian Nations was China’s largest trading partner on a regional basis, followed by the European Union.
Amidst this, the U.S. remained China’s largest trading partner.
However, Russia emerged as a bright spot, with China’s exports to the country climbing nearly 47% in 2023, and imports rising almost 13%.
“Chinese manufacturers anticipate production to rise over the course of 2024 amid forecasts of firmer global demand, higher client spending and new product investment,” Caixin said in a release for its December manufacturing purchasing managers’ index.
The index showed mild improvement from November, but “the degree of optimism softened from November and remained below the series average,” the report noted.
The report also mentioned a decline in the employment sub-index, stating “firms often mentioned that they had opted not to replace voluntary leavers or trimmed headcounts as demand was more subdued than expected.”
“Our base case is for exports to rise 2% in 2024 after falling 5% [in 2023]. If exports slow more than expected, policymakers would turn more proactive in terms of domestic policy supports,” Macquarie’s Chief China Economist Larry Hu said in a Jan. 5 report.
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Autos have been a bright spot in China’s recent trade data, with the country expected to have surpassed Japan as the world’s largest exporter of cars in 2023.
Rapid growth in the electric car market as well as demand from Russia have helped boost China’s auto exports, according to Sarah Tan, an economist at Moody’s Analytics.
“After Russia’s invasion of Ukraine in February 2022, many auto manufacturers had left the country only to have that gap filled by Chinese manufacturers,” she said in an email. “In the first eleven months of 2023, auto shipments to Russia rose about six times that of 2022 in value terms.”