Exports to Russia boost China’s External Trade Rebound

China’s external trade volume has rebounded faster than expected in the first two months of this year, partly due to electronics and increased exports to Russia and other emerging.

According to the Financial Times, China’s exports grew by 7.1% in January and February compared to the same period last year, surpassing Reuters analysts’ forecasts of 1.9% growth.

Imports increased by 3.5% compared to the expected 1.5%. China releases economic data for January and February together to account for disruptions related to the lunar New Year holiday.

“The primary factor driving this export rebound is essentially the growth in the global production cycle of technological products, primarily electronics,” said Tao Wang, chief economist for China at UBS.

The improvement in China’s trade metrics, compared to a 5% decline in 2023, comes as good news for policymakers as the country’s leaders gather in Beijing this week for the annual session of the “pocket” parliament.

China’s economy is recovering from a real estate market crisis, weak consumer and investor confidence, and a decline in export revenues last year.

However, the government has set an ambitious target of 5% GDP growth for 2024, according to analysts’ estimates.

In the first two months of this year, the Association of Southeast Asian Nations (ASEAN) became China’s largest trading partner, with trade growing by 4.8%. The European Union followed, with trade shrinking by 4.1%.

Trade with the United States slightly increased by 0.7%.

Among China’s individual trading partners, the significance of Russia has grown rapidly, with bilateral trade increasing by 9.3% in the first two months of this year to a total of $37 billion, and China’s exports to its neighbor rising by 12.5%.

Last year, Russia became China’s fifth-largest trading partner, rising from ninth place in 2020, as trade volume reached $240 billion, surpassing the $200 billion target.

Russia has roughly maintained this position in the first two months of this year, slipping to fifth place only by a percentage point behind Australia.

Chinese Foreign Minister Wang Yi emphasized on Thursday how the two countries are developing trade within the framework of strategic relations.

These comments are likely to heighten concerns in the EU, which believes that China is tacitly supporting Russia’s invasion of Ukraine.

“China and Russia have created a new paradigm of relations between major powers,” Wang Yi said at a press conference during the National People’s Congress.

“The political mutual trust between the two sides continues to deepen. Russian natural gas flows into Chinese homes, and Chinese cars drive on Russian streets.”

European leaders have repeatedly warned Beijing that its support for Russia undermines China’s popularity in the EU.

However, Wang Yi stated that China’s partnership with its neighbour aligns with its own interests and is not aimed at any “third parties.”

Main Image: Kremlin.ru

__________________________________________________________________________________________________

Read also: “Authoritarian countries, such as Russia and China, are trying to divide and weaken the EU,” says Andreas Schieder MEP

“The investigations of INGE have shown us that the problem of foreign influence is bigger than we thought.

“Authoritarian countries, such as Russia and China, are trying to divide and weaken the EU, and undermine our democratic model.”

___________________________________________________________________________________________________