“Thanks to exports, China is getting richer, but not the Chinese anymore”
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OMnipresent in political speeches, the decoupling of economies remains strangely absent from statistics. In July, China even for the first time in its history recorded a trade surplus of more than 100 billion dollars (97 billion euros): 101.3 billion dollars exactly. A spectacular monthly result which is not accidental: over the first seven months of the year, the surplus amounted to more than 492 billion dollars. The 313 billion recorded over the same period in 2021 already appear a long way off. However, they too constituted a record at the time. Barring a collapse in global demand by December, China should therefore experience a new historic trade surplus in 2022.
Who buys from China? Everyone, the United States in the lead, followed by Europeans and Asians. Four years after the start of the trade war launched by Donald Trump and more or less continued by Joe Biden, the American deficit with China remains abysmal ($244 billion over seven months). In 2022, the United States sold fewer goods to the Chinese than the European Union, South Korea, Japan… and even Taiwan. Qualified for “historic deal” by Trump, the compromise reached between Beijing and Washington in January 2020 that China should buy an additional $200 billion worth of American goods will go down in history as the epitome of the trade deal that was never fulfilled.
Even if it goes upmarket, China remains indeed the workshop of the world. Is this good news for Beijing? Only in part. Admittedly, being the first economic partner of around 120 countries in the world gives it a privileged status. After interviewing experts from Bangladesh, Chile, Indonesia, Kazakhstan, Kenya, Nigeria, Saudi Arabia and Turkey, the German Merics Institute observes a general tendency of these countries to lean more towards the States States to ensure their security but rather to China for their economy. “All the countries reviewed here refuse to take sides. Their governments hope to continue to seize opportunities born of this Sino-American rivalry,” writes Merics in a note published in August.
Household consumption down
But this dependence is two-way. If exports remain the main driver of the Chinese economy, it is both because its industry has emerged stronger from the crisis caused by Covid-19 and has taken market share from its competitors, but it is also because Chinese household consumption continues to decline. Thanks to exports, China is getting richer, but not the Chinese anymore. Faintness. Imports of electrical or electronic goods are decreasing. Youth unemployment is at its highest: it affects 18.4% of 16-24 year olds.
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