China reports higher-than-expected export growth in December

For 2023, exports fell by 4.6% while imports fell by 5.5%, according to customs data.

Imports rose 0.2% in December compared to the previous year in dollar terms. This is slightly lower than the 0.3% increase expected by analysts polled by Reuters.

Demand for Chinese goods fell amid slowing global growth, and the country's trade with its major partners declined in 2023.

The Association of Southeast Asian Nations was China's largest trading partner on a regional basis in 2023, followed by the European Union.

Among countries, the United States remained China's largest trading partner.

Russia was a rare bright spot, with China's exports to the country rising nearly 47% in 2023, and imports rising nearly 13%.

“Chinese manufacturers expect production to rise throughout 2024 amid expectations of increased global demand, higher customer spending and investment in new products,” Caixin said in a December manufacturing PMI release.

The index showed a slight improvement compared to November. “However, optimism declined compared to November and remained below the series average.”

The report also noted a decline in the employment sub-index. “Companies often reported that they chose not to voluntarily replace departures or reduce headcount because demand was weaker than expected,” Caixin’s analysis said.

“Our base scenario is for exports to rise by 2% in 2024 after falling by 5%.” [in 2023]. “If exports slow more than expected, policymakers will shift more proactive in terms of supporting domestic policy,” Larry Hu, chief China economist at Macquarie, said in a January 5 report.

The auto industry was a bright spot in China's recent trade data. The country is expected to overtake Japan as the world's largest automobile exporter in 2023.

Sarah Tan, an economist at Moody's Analytics, said the rapid growth in the electric car market as well as demand from Russia helped boost China's car exports.

“After the Russian invasion of Ukraine in February 2022, many auto manufacturers left the country for Chinese manufacturers to fill the gap,” she said in an email. “In the first eleven months of 2023, vehicle shipments to Russia were almost six times higher than in 2022 in value terms.”