Despite deflation strains in December, China’s exports gained some momentum before crossing the threshold into 2024. This fuelled hopes that policy measures will ebb and give the Chinese economy a moment to catch its breath, especially since it enters the New Year with notable chinks in its armour.
Movements in China’s imports and exports may give its economy a much-needed boost
According to Reuters, Chinese policymakers are relieved about the uptick in global trade as it could signal lower borrowing costs. Others, however, are quick to point out that the second-largest global economy still faces issues in its property market, overly careful consumers, and geopolitical hurdles that may hobble any gains.
The year-on-year December comparison between 2022 and 2023 showed a 2.3% rise in exports. This is significant compared to the 0.5% November 2022 increase and analyst predictions of a 1.7% gain.
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Data also shows the country’s annual iron ore imports climbed by 6.6% on the back of higher demand and steel-based exports. According to China’s General Administration of Customs, this country is the largest iron ore consumer globally and imported roughly 1.18 billion tons in 2023.
This is the first rise in iron ore imports since 2020 when Beijing capped its annual steel output in 2021 and 2022 to lower carbon emissions. Last year there were no such restrictions but China is still buckling under economic pressures brought on by COVID-19.
Following these jumps, crude steel output was 1.5% higher between January and November 2023. This increased demand invariably fuelled the higher import rates.
