China recently released its customs data for September, revealing a decrease in both exports and imports, although the decline in exports was less than expected. In U.S. dollar terms, exports fell by 6.2% compared to the same period last year, which was below the anticipated 7.6% drop forecast by analysts in a Reuters poll.
Simultaneously, imports also saw a decline of 6.2% in U.S. dollar terms, slightly surpassing the 6% decline expected by the Reuters poll, marking a reduction in both inbound and outbound trade for China.
Throughout this year, China has consistently witnessed a year-on-year decline in exports since May. The last positive print for imports on a year-on-year basis was observed in September last year. Lackluster global demand for Chinese goods and subdued domestic demand contributed to the overall slump in China’s trade performance.
Notably, while trade with major partners experienced a decline, Chinese imports from the European Union showed modest growth in September compared to the previous year, as per CNBC calculations based on official data.
The United States remains China’s largest single-country trading partner, while the Association of Southeast Asian Nations (ASEAN) has recently surpassed the EU as China’s primary trading partner on a regional basis.
Over the first three quarters of the year, China’s exports to the U.S. decreased by 16.4%, and imports dropped by 6%. However, Russia demonstrated growth in both exports and imports, the only major country or region to do so according to the Chinese customs agency’s report.
In terms of specific product categories, China’s global export of automobiles continued to show notable growth, rising by 64.4% from a year ago for the first three quarters of 2023. However, this growth was slower than the 69% pace recorded as of August. Similarly, exports of ships and boats picked up pace in the third quarter with a 16.2% year-on-year increase.
Conversely, the volume of China’s cosmetic imports saw a decline of 14.2% in the first three quarters compared to a year ago. In contrast, the volume of crude oil imports rose by 14.6% during that time but experienced a decrease in U.S. dollar value.
The gradual economic recovery in China has been affected by a slowdown, especially due to challenges within the real estate sector. As a result, the International Monetary Fund (IMF) adjusted its 2023 growth forecast for China from 5.2% to 5%, while maintaining a global growth forecast of 3% for the year.
Amid growing tensions with the U.S. and Europe, China has been focusing on expanding trade with regional partners in Southeast Asia and countries involved in the Belt and Road Initiative (BRI). The BRI is a China-led effort to develop regional infrastructure such as ports and railways.
China reported having trains running to 217 cities in 25 European countries by the end of September, contributing significantly to trade between China and the EU. Officials also highlighted the growth in imports and exports with Belt and Road partner countries, which reached $19.1 trillion between 2013 and 2022, with an average annual growth in trade of 6.4%.
The upcoming third Belt and Road forum, scheduled to be held in Beijing, will bring together various countries, and it’s anticipated that Russian President Vladimir Putin will attend the event.
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