China’s exports shrank sharply in December as global demand cooled, highlighting risks to the country’s economic recovery this year, but a more modest decline in imports bolstered views that domestic demand will slowly recover in coming months.
While imports are expected to support a wave of pent-up demand after China abandoned its tough Covid-19 measures in December, exports are likely to weaken as the global economy verges on recession.
“Weak export growth highlights the importance of boosting domestic demand as the main driver of the economy in 2023,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, adding that markets expect Beijing to announce more measures to support consumption. .
Exports contracted 9.9% year-on-year in December, extending an 8.7% drop in November, although slightly better than expectations, customs data showed on Friday. The drop was the worst since February 2020.
Reflecting the retreat in world demand, shipments to the United States decreased by 19.5% in December, while those to the EU fell by 17.5%, according to Reuters calculations based on official data.
Despite the sharp drop in shipments in recent months, China’s total exports increased by 7% in 2022 thanks to its strong trade with Southeast Asian nations, as well as a boom in exports of new energy vehicles. Still, the growth was much lower than the 29.6% gain in 2021.
Imports fell 7.5% last month, moderating from a 10.6% decline in November and better than the 9.8% drop forecast.
China’s 2022 trade surplus reached an all-time high of US$877.6 billion, the highest since records began in 1950, compared with US$670.4 billion in 2021.
Source: CNN Brasil
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