The world’s biggest exporter reported another month of dismal trade figures for June. Chinese exports declined 13% year-on-year in the month to $285.3 billion, and imports fell 6.9% to $214.7 billion.
The decline was driven by a massive drop in consumer spending in the U.S. and Europe, caused by inflation, fallout from the Covid-19 pandemic, and bell-tightening in households around the world.
But it masked a stark rise in energy, and agriculture, imports that is becoming one of China’s pivotal roles in the global economy.
China’s imports of coal and lignite soared 47.4% by value to $4.5 billion, and more than doubled by quantity, rising 110.1% to 39.9 million tons, and imports of natural gas rose 3.8% by value to $5 billion and also more than doubled by quantity, up 116.9% to 10.4 million tons.
Ironically, it’s China’s massive boom in electric vehicle construction and use that is driving imports of environmentally-polluting coal. The rock is need to fuel power plants that feed the batteries used by EVs. Although it’s thought to be a 19th century technology, coal consumption reached eight billion tons in 2022, an all-time record, according to the International Energy Agency. The world’s three largest coal producers, China, India and Indonesia, “all hit production records in 2022”, according to the IEA.
The energy trade underpins China’s special relationship with Russia. Exports to Russia soared 91.2% to $9.6 billion, while imports rose 14.2% to $11.3 billion.
China has also been hiking imports of food and agriculture. Imports of agricultural products rose 4.5% to $21.2 billion. Imports of soybeans increased 5.4% by value to $6.1 billion, and 24.5% by quantity to 10.3 million tons.
Exports of manufactured goods to China’s key customers fell. Shipments to the European Union dropped 13.2% to $44 billion, exports to the U.S. fell 23.7% to $42.7 billion, and exports to ASEAN countries decreased 15.5% to $43.3 billion.
The declines were spread around all major categories of manufactured goods. Exports of high-tech products, for example, fell 16.1% to $68.7 billion. Exports of toys dropped 25.9% to $3.5 billion. Exports of footwear fell 21% to $4.5 billion.
No wonder that the government was prompted to offer an explanation for the drop in consumer goods-based trade.
“A weak global economic recovery, slowing global trade and investment, and rising unilateralism, protectionism and geopolitics” were the reasons for falling exports, Lu Daliang, a government spokesman, told reporters.
One exception was again the EV-based car trade. Exports of automobiles rose 109.8% to $7.8 billion. Another rare bright spot: exports of household appliances increased 4.1% to $7.5 billion.
The import market presented a bleak picture. Imports from the EU fell 0.6% to $24.9 billion, and shipments from the U.S. fell 4.3% to $14 billion. Imports from ASEAN countries declined 3.2% to $34.1 billion. Imports of high-tech products fell 9.8% to $58.5 billion.
But there were bright spots here, too. Imports from France increased 20.5% to $3.4 billion, and shipments from the Netherlands soared 63.8% to $1.6 billion. China imports large quantities of aircraft parts, cereals and perfumes from those countries. And overall imports of automobiles rose 5.3% to $3.8 billion.