Trade between China and the rest of the world slowed down in March due to declining imports

Trade between China and the rest of the world slowed its year-on-year rate of progress to 5.8% in March due to the contraction of imports, according to official data released on Wednesday by the Asian country's General Customs Administration.

In the first two months, Chinese foreign trade had increased by 13.3% year-on-year, while in 2021 overall it did so by 21.4% thanks to a significant rebound in exports in the context of the global economic recovery following the initial impact of the COVID-19 pandemic.

Analysts were already forecasting a significant slowdown in trade progress in 2022, especially in the first few months, due to the “exceptionally strong” progress in Chinese exports in the same period last year.

Finally, according to Customs data, trade between China and other countries stood at about 3.21 billion yuan ($503.66 billion) in March.

Specifically, exports grew by 12.9% compared to the same month in 2021, reaching 1.75 trillion yuan (275,432 million dollars).

However, imports contracted by 1.7 per cent, falling to 1.45 billion yuan ($228.22 billion).

Thus, the Chinese trade surplus ended March at 300.58 billion yuan ($47,213 billion), 241.7% more than in the same month of the previous year.

So far this year, trade increased by 10.7% to 9.42 trillion yuan ($1.48 trillion), with a rise of 13.4% for exports and 7.5% for imports.

Trade with Russia grows 26% this year

In the breakdown by geographical area, all eyes were on trade between China and Russia after the leaders of both countries strengthened their strategic partnership just weeks before Moscow launched its military attack against Ukraine, to which Beijing has reacted ambiguously, criticizing the sanctions and blaming the conflict on the United States.

In March, Sino-Russian trade denominated in yuan increased by 11 per cent year-on-year to 74.14 billion yuan ($11.647 billion), while year-to-date growth is 26.2 per cent to 243.03 billion yuan ($38.17 billion).

However, in 2021 trade between the two powers had increased considerably more (by 35.8%) to reach a record figure of $147 billion, with Chinese purchases of Russian fuels prominent in the face of the great rebound in energy consumption due to the post-pandemic industrial revival.

“Clearly, China is not intervening to buy Russian oil that Western countries despise, at least not at a significant level,” explains Julian Evans-Pritchard, an analyst at British consulting firm Capital Economics.

Falling demand?

The top two places on China's list of major trading partners continued to go to two supranational blocs: the Association of Southeast Asian Countries (ASEAN) and the European Union (EU).

Between January and March, exchanges with the Asian group of nations increased by 8.4%, less than with the Twenty-Seven (+10.2%).

Meanwhile, trade denominated in yuan with the United States, a country with which China has been in a trade war since March 2018, rose by 9.9% in that period thanks to the strength of exports (+14.3%), as Chinese purchases of products from the North American nation fell by 1.3%.

In the case of Latin America, trade with China rose by 9.6% until March, reaching 675.44 billion yuan (106.099 billion dollars).

Evans-Pritchard, which takes as a reference to dollar-denominated trade data - a currency in which exchanges grew by 7.5% year-on-year in March - says that the slowdown is not only due to restrictions due to the recent outbreaks of COVID-19 experienced in China, but also to lower demand for its exports.

“The biggest drops in shipments abroad were in electronics, furniture and recreational products, which points to a relaxation in demand for these goods linked to the pandemic,” says the expert, who forecasts an even greater drop in Chinese sales abroad over the next few months.

(With information from EFE)

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