China registered a surprise jump in foreign trade at the start of the year, partly because of strong demand from Russia, India and emerging markets in Africa and Latin America.
Exports from the world’s second-largest economy rose by 7.1 per cent in the January-to-February period, beating the 1.9 per cent growth forecast by a Reuters poll of economists. The growth is also significantly higher than the 2.3 per cent gains recorded in December.
China typically reports economic data for the first two months of the year together to avoid any distortions caused by the Lunar New Year holiday.
Imports also beat expectations, up 3.5 percent from a year ago, while the trade surplus reached US$ 125.2 billion, about 7 per cent higher than in the same period last year.
China’s economy is battling a number of headwinds, including weak consumer and investor confidence, high youth unemployment and a long-running real estate crisis. The turnaround in trade — a year ago it was shrinking — is a rare bright spot in a gloomy picture.
Apart from the weak base effect, strong demand from emerging markets helped China’s trade surge at the start of the year. Shipments to Africa, Latin America, and India rose by 21 per cent, 20.6 per cent, and 12.8 per cent respectively.
“While the strong export growth to India may reflect more its strong domestic economy, exports to Africa and LatAm could indicate growing trade ties between China and these emerging economies, amid a broad global geopolitical shift,” said Nomura analysts yesterday.
India is the world’s fastest-growing major economy, and its government expects it to expand by 7.6 per cent this year.
Meanwhile, China’s exports to Russia increased 12.5 per cent, representing a slowdown from the rapid growth seen last year. Moscow became China’s 10th-largest trading partner last year, with a record US$ 240 billion worth of goods shipped between the two countries. At the start of 2024, it slipped to the 11th spot.
“China’s exports to Russia are unlikely to surge again in the near term to levels on par with those in 2023, due mainly to a high base and limited space for Chinese exporters to further expand their market shares in Russia,” said Nomura analysts yesterday.
China’s shipments to the United States also increased, up 5 per cent from a year earlier. But its exports to other traditional trading partners, such as the European Union, Japan, and Australia, registered declines.
Source: CNN
