China’s exports rose unexpectedly. The exchange of goods with Russia, which is now larger than trade with Germany, is particularly booming. The value of China’s exports in US dollars soared 14.8 percent in March compared to the same period last year, customs officials in Beijing reported on Thursday. The rise to $315 billion surprised experts, who had expected another decline after a 6.8 percent slump in January and February.
China’s trade with Russia rose particularly sharply in March by 71.9 percent to a value of around 20 billion US dollars. Exports to the neighbors subject to western sanctions even rose by 136.4 percent. Imports – including cheap energy imports – increased by 40.5 percent, according to customs officials. China has backed Russian President Vladimir Putin since it began invading Ukraine more than a year ago.
New momentum
The strong recovery of the Chinese export machinery should give the second largest economy new impetus. Imports showed a slight minus of 1.4 percent to 227 billion US dollars. However, this decline was smaller than in January and February with 10.2 percent. Experts had also expected significantly weaker import figures.
The strong increase in foreign trade of 7.4 percent in March marked a trend reversal for the world’s largest trading nation. Exports had previously declined for five straight months. The trade surplus rose to $88 billion.
The USA also benefited from the development: China imported 5.6 percent more from the United States in March. Its exports to the largest economy fell by 7.7 percent.
On the other hand, Germany’s exporters again had to accept a minus of 2.1 percent. China’s exports to Germany also fell – by 1.4 percent. The German-Chinese trade only reached a total value of 18.4 billion US dollars. China’s exports to the EU, on the other hand, increased by 3.4 percent, as did its imports from the EU.
Fixed supply chain disruption
The surprising increase in overall foreign trade was partly explained by a resolution to supply chain disruptions, which may have had a stronger impact than expected. “Today’s data suggests that the drop in external demand was not as worrying as previously thought,” Michelle Lam of Société Générale told Bloomberg.
According to Bloomberg economist Eric Zhu, it may also be a fluctuation due to the preceding Chinese New Year celebrations: “The behavior in March could reflect a catch-up effect that does not last.” Even if pandemic-related disruptions are resolved, China’s exports are likely to continue to suffer from weak global demand going forward.
“The Chinese economy is picking up speed again,” said the executive board member of the German Chamber of Commerce (AHK) in China, Jens Hildebrandt. However, the significant increase in exports is “partly due to catch-up effects from the Covid wave in January”. The sticking point remains domestic demand, “which is not recovering to the same extent”.
Chinese foreign trade weakened noticeably last year due to the strict corona measures and lower demand for goods “made in China”. After the end of the zero Covid strategy with its severe restrictions in December, a violent virus wave initially paralyzed the Chinese economy, which only recently picked up noticeably again.
The new head of government, Li Qiang, made it clear just how important exports are for China when he called on a cabinet meeting last week to “try every method” to stabilize foreign trade. While Chinese growth was only three percent in 2022, the government has set a target of “around five percent” for this year. The International Monetary Fund (IMF) expects 5.2 percent.
