As the global economy recovers fully from the Covid-19 pandemic, the Chinese industrial sector appears to be facing headwinds, according to an analysis by Trade Data Monitor, the world’s premier source of trade statistics.
China’s exports grew by 17.9% year-on-year to $331.3 billion, beating analyst expectations. Imports, however, increased by only 1% in June from a year earlier to $233.3 billion, below predictions of around 3%, and suggesting that Chinese factories are cutting the inventories of goods they require as raw materials for advanced manufacturing.
In addition, the imbalance between China’s export and import growth continue to pose political challenges in the form of rising protectionist sentiment in the U.S. and Europe. China’s total trade surplus rose to $97.94 billion in June from $78.76 billion in May.
To boot, China is no longer importing as many soybeans, which is sure to bother U.S. farmers and their political representatives. Imports of soybeans fell 23.1% by quantity to 8.3 million tons. By value, they dropped 3.8% to $5.8 billion. Overall, imports of agricultural products rose only 0.8% to $20.3 billion.
The world’s supply chains for making laptops, phone and tablets continues to run through Shanghai. Chinese high-tech exports increased in June 7.5% to $82.5 billion.
Mobile phone exports increased 2.8% to $10.6 billion. By quantity, however, they fell 10.4% to 69.3 million, suggesting that China is making higher-end phones while leaving the making of lower-priced versions to Vietnam and other countries.
After falling off during Covid, China’s manufacture of its consumer goods staples continues to rebound, especially for products needed to leave the home. Footwear exports rose 45.8% to $5.8 billion. Exports of toys rose 35.7% to $4.7 billion.
There are signs that Covid infections are receding. Imports of medical devices dropped 3.8% to $1.4 billion.
The lack of import growth suggests that China’s pandemic export boom might be dropping off. Imports of high-tech products fell 9.5% to $65.3 billion.
“The Covid-19 pandemic and the international environment are currently becoming more severe and complex,” said Li Kuiwen, a government spokesman. “China’s trade development still faces unstable and uncertain factors, and there is still a lot of pressure to maintain stability and improve quality.”
To secure raw materials, China has increased its reliance on Russia. China’s imports from Russia surged by 54.2% to $9.7 billion in June compared to a year earlier, but exports declined by 17% to $5 billion. The ruble is weak, and Russian consumers are running out of cash.
The upshot: China’s trade deficit with Russia expanded by over 20 times to $4.7 billion.
That is the exception. China’s trade surplus has been on the rise for almost all its trading partners. In June, China’s surplus with the U.S. increased 27% from a year earlier to US$41 billion. China’s imports from the European Union declined 9.7% to $25 billion in June, while exports grew by 17.2% to $50.5 billion.
It’s happening even in Asia. China’s exports to the ASEAN nations rose 29% year-on-year to $52.1 billion in June, while imports rose by 4.8% to $35.5 billion.
China’s burgeoning automotive industry is making the country increasingly self-sufficient. Imports of motor vehicles fell 37.8% to $3.6 billion, while exporting cars and trucks increased 21.9% to $3.7 billion. It’s the first time in China’s modern era that it’s notched a surplus in trade in automotive vehicles.