China39s exports collapse for first time in seven years

China's exports collapse for first time in seven years

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A cargo ship prepares to dock at the container terminal of Lianyungang Port in China's eastern Jiangsu province, December 6, 2023

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China's full-year exports fell for the first time since 2016 as global demand weakened.

Exports measured in U.S. dollars totaled $3.38 trillion in 2023, down 4.6% from a year earlier, according to Chinese customs figures released on Friday. In 2022, Chinese exports increased 7% year-on-year.

The last time China saw a decline in foreign shipments was in 2016, when exports fell 7.7% amid weak demand.

Last year, imports fell 5.5% to $2.56 trillion. The world's second-largest economy thus achieved a trade surplus of $823 billion.

“The global economic recovery was weak last year,” Lyu Daliang, a spokesman for the General Administration of Customs, said at a news conference in Beijing on Friday. “Sluggish foreign demand has hurt China’s exports.”

He expects exports to continue to face “difficulties” in 2024 as global demand is expected to remain weak and “protectionism and unilateralism” will hamper the sector's growth, he added.

However, there is a silver lining. In December, exports rose 2.3% from the same month last year, marking the second straight month of growth and pointing to a slight improvement in global appetite for Chinese goods. The country's exports had declined for six consecutive months before November.

The United States remained China's largest retail partner in 2023, as bilateral trade accounted for 11.2% of total trade. However, this value was 11.6% lower than the 2022 total.

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BYD electric cars wait to be loaded onto a ship at the international container terminal of Taicang Port in China's eastern Jiangsu province

ASEAN, the 10-nation bloc in Southeast Asia, and the European Union accounted for 15.4% and 13.2% of total trade with China, respectively, Customs figures showed.

The country also saw a 69% increase in the total value of automobile exports last year, the highest across all categories.

In terms of volume, China delivered 5.22 million vehicles in 2023, up 57% from 2022. This was thanks in part to rapid growth in electric vehicles, Lyu said.

“One in three cars exported by China is an electric car,” he said at the press conference.

“Looking forward, we believe China's automotive industry still has a strong comprehensive competitive advantage and can continue to offer more and better innovative products to meet the needs of global consumers,” he added.

Earlier this week, a major Chinese automobile company said the country was “confident” of overtaking Japan last year to become the world's largest car exporter, driven by strong demand in Russia and growing global appetite for electric vehicles.

The rankings will be confirmed once Japan's official annual figures are released, expected in the next few weeks.