BEIJING, Jan 10 – A recent Reuters survey suggests that China’s exports may have experienced accelerated growth in December for the second consecutive month, signaling a potential recovery in global trade. This positive trend is attributed to a revival in the electronics industry and the anticipation of reduced borrowing costs in 2024. The survey, which included responses from 32 economists, forecasts a 1.7% increase in China’s exports in December year-on-year, following a modest 0.5% growth in November, marking the end of a six-month decline.
The global trade landscape faced challenges in 2023, with rising interest rates in the United States, Europe, and other key markets impacting demand. The United Nations reported a projected contraction in goods trade by nearly $2 trillion, or 8%, last year. However, recent export data from China, South Korea, and Germany indicate a potential shift towards improvement.
Notably, South Korea’s exports, often seen as a barometer for global trade health, increased for the third month in December. Similarly, Germany reported a 3.7% month-on-month rise in its November exports. Economic analysts also predict a decrease in interest rates by at least 1.5 percentage points in the United States and Europe within the year, potentially boosting demand for imported goods.
Xu Tianchen, a senior economist at the Economist Intelligence Unit, highlighted the positive impact of a cyclical upturn in the global electronics sector on trade. Citing better-than-expected growth in Taiwan’s December export data, driven by increased demand for high-tech products in the United States, Xu expressed optimism for a more favorable trade outlook in 2024.
The upcoming release of China’s trade data on Friday is also expected to reveal a slight improvement in imports, with a projected growth of 0.3% in December following a 0.6% decline in November. However, recent export figures to China from South Korea and Taiwan showed declines in December, while German exports to China in November saw a 3.1% increase from the previous month.
The United Nations Conference on Trade and Development’s December Global Trade Update conveyed a cautious and generally pessimistic forecast for global trade in 2024. Additionally, the Baltic Dry Index, a measure of global trade activity, dropped 7.3% to its lowest point since November 23, underscoring the challenges faced by the shipping industry, including recent attacks on container ships in the Red Sea by Iran-aligned Houthi militants.
Economists’ median predictions indicate that China’s trade surplus may widen, with an estimated increase to $74.8 billion in December from $68.4 billion in November.
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