China’s exports drop as Russia trade hits record high
China reported a record trade surplus in 2022, as its key export sector delivered robust growth throughout the year, providing support for the country’s economy. However, a decline in December’s shipments suggests that exports may struggle in early 2023 due to a weakening global economy.
According to data from the General Administration of Customs, China’s total trade of goods reached an all-time high of 42.07 trillion yuan ($6.3 trillion) in 2022, a 7.7% increase from 2021. Measured in US dollars, exports increased 7% while imports grew by 1.1%, resulting in a trade surplus of $877.6 billion, surpassing the previous record of $676 billion set in 2021.
The surplus was largely attributed to strong export growth in the first quarter of 2022, due to a weak Chinese currency and rising prices of goods. However, this trend began to change in October, with exports declining 0.3%, the first drop since mid-2020, and falling further in November by 8.7%.
According to Capital Economics analysts, the recent decline in imports can be attributed to weakening global demand for Chinese goods as well as disruptions to logistics networks and goods supply caused by labor shortages and a resurgence of infections.
Despite the improvement in imports, which decreased by 7.5% in December as compared to November’s 10.6% drop, exports may continue to struggle in the coming quarters due to slowing growth outside of China. The analysts believe that with the rapid fading of virus disruptions and broader policy support, there will be a sharp recovery in domestic demand which will lift imports.
China Russia Ties
China and Russia’s goods trade reached a new high of 1.28 trillion yuan ($190 billion) in 2022, an increase of over 30% from the previous year, said Lyu Daliang, a spokesperson for China’s customs authority. This accounts for 3% of China’s total trade.
The two countries’ economic ties have grown stronger since Russian President Vladimir Putin’s visit to Beijing in February 2022, just before the Russian invasion of Ukraine. Customs data shows that China has imported oil and coal from Russia, with Russia becoming China’s top crude oil supplier in November, surpassing Saudi Arabia.