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China’s December Imports/Exports Continued to Decline

Well-known Chinese news site Sina (NASDQ: SINA) recently reported that, according to the data released by the Chinese General Administration of Customs, in U.S. dollar terms, the Chinese exports in December 2022 decreased by 9.9 percent year-over-year, and the imports decreased by 7.5 percent year-over-year. In December, the exports declined for the third consecutive month and the decline has continued to expand. This was mainly due to the increasing pressure of the global economic recession and the slowdown in external demand. December’s exports to the United States fell by 19.5 percent year-over-year. They have continued to be in a state of deep decline and there has been a negative growth for five consecutive months. This has mainly been due to the obvious decline in the demand for Chinese goods in the U.S. domestic market. The Fed’s continuous and substantial interest rate hikes have formed a strong inhibitory effect on the aggregate domestic demand in the United States. In addition, after the pandemic, U.S. domestic consumption has shifted from goods to services. It is very difficult for Chinese exports to the U.S. to turn positive in the short term. In the meantime, China’s exports to the EU fell by 17.5 percent year-over-year. This was a 6.9 percentage points widening loss from the previous month, and a negative growth for four consecutive months. Also, China’s exports to Japan fell by 3.3 percent year-over-year. Overall, China’s exports will slow down sharply in 2023. It is expected that the surplus of the trade in goods  will narrow significantly. In addition, as the outbound travel will gradually resume, the deficit in service trade may expand again.

Source: Sina, January 13, 2023