The June drop in China’s exports and imports was a record for the last three years

China’s foreign trade statistics released yesterday show a record drop in Chinese exports over the past three years. This confirms the fears of analysts, noting a slowdown in China’s economic recovery after the pandemic. The reduction in supplies from China is explained, among other things, by the growing confrontation with the United States, which is why the mutual trade turnover between the two countries decreased by 14.5% in the first half of 2023. Against this background, Russian trade with China is growing rapidly (in volume, however, it is almost three times inferior to the American one) – mutual deliveries of the Russian Federation and China increased by 40.6% over the six months.

The volume of China’s exports in June in annual terms decreased by 12.4%, to $285.32 billion, the General Administration of Customs of the People’s Republic of China said on Thursday. The June drop was the most significant since February 2020. Imports to China over the past month decreased by 6.8%, to $214.7 billion. Analysts at Trading Economics predicted a much less noticeable decrease – exports by 9.5%, imports – by 4%. According to their estimates, such a significant decrease in imports is due to with a stronger-than-expected weakening of domestic demand. Experts attribute the fall in export indicators, among other things, to the general weakness of the world economy. In general, it follows from customs statistics that the Chinese authorities have not yet been able to achieve a sustainable economic recovery after the pandemic.

According to the results of the entire first half of the year, the volume of trade between China and the United States decreased most noticeably – by 14.5%, to $ 327.26 billion. Exports from China to the United States fell in annual terms by 17.9%, to $ 239.35 billion, American imports to China – by 3.7%, to $87.91 billion. The reduction in trade turnover is explained both by the already existing trade restrictions and the increased confrontation between Washington and Beijing. In October 2022, the United States imposed a ban on the sale to China of the most advanced chips, as well as components for their production. China began to retaliate by banning purchases from one of the world’s largest microprocessor manufacturers, the American company Micron, in May this year. The issue of lifting mutual restrictions remains one of the main issues at all key meetings of the parties, in particular, it was discussed during the visit of US Treasury Secretary Janet Yellen to China last week (see Kommersant on July 10). So far, it has not been possible to achieve a curtailment of restrictive measures, and countries are actually working to reduce trade interdependence: according to UNCTAD, both the US share in China’s total exports and China’s share in total US imports are declining.

Not only the US, but also the EU is concerned about curbing the growth of China’s influence on world trade. However, so far European concerns have not turned into concrete actions and are expressed at the level of theory, in particular, in the strategy for ensuring economic security recently published by the European Commission (see Kommersant of June 21).

Chinese statistics confirm the strengthening of the trend towards “political proximity” in trade relations, previously recorded by UNCTAD analysts: to reduce the interaction of countries with different values ​​and build up with similar ones (see “Kommersant” of June 27). This can be illustrated by data on the growth of trade volumes between Russia and China. The trade turnover between Moscow and Beijing in the first six months of 2023 grew by 40.6% year on year, to $114.54 billion. According to the data of the Chinese Customs Administration, exports from China to Russia increased by 78.1%, to $52. 28 billion, deliveries of Russian goods to China increased by 19.4%, to $62.26 billion.

Christina Borovikova