BEIJING: In November, Chinese exports saw their first increase in seven months, marking a positive development amid the ongoing recovery from the Covid-19 pandemic, according to officials in Beijing. However, this improvement should be considered in the context of a low base from the previous year when a zero-Covid policy impacted output and business activity. Despite the rise in overseas shipments by 0.5 percent year-on-year to $291 billion, analysts caution that the recovery may not be sustainable, especially with weak consumer activity domestically and uncertainties in global economies.
Zhiwei Zhang, President and Chief Economist at Pinpoint Asset Management, notes that while exports are showing "sequential growth," it remains uncertain whether they can be a significant growth pillar into the next year. Zhang emphasizes the importance of China relying on domestic demand as the primary driver for growth in 2024, particularly given the cooling economies of Europe and the United States.
Chinese exports, typically a key growth driver, have faced a declining trend since October of the previous year, with notable drops in shipments to the United States and the European Union. Importantly, exports to Russia surged over 50 percent, showcasing Beijing's economic ties with its ally amid the ongoing conflict in Ukraine.
On the other hand, imports declined by 0.6 percent to $224 billion in November, indicating a return to contraction after an unexpected increase in October. Analysts suggest that domestic demand in China is not substantially improving, and there is no clear upward trend in exports despite slightly better-than-expected growth.
China's economy, the world's second-largest, expanded moderately by 4.9 percent in the third quarter, slightly below Beijing's target of five percent. Challenges persist, including weak global demand affecting exports, a debt-fueled property crisis, low consumption, and a recent credit rating outlook downgrade by Moody's. Ting Lu, Chief China Economist at Nomura, underscores that property issues remain a significant drag on China's economy, and despite recent stimulus measures, it may be premature to declare a bottom. — AFP
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