Radio Free Asia (RFA) recently reported that the latest data released by China’s General Administration of Customs shows China’s exports fell in October by 6.4 percent year-over year in US dollar-terms. Imports increased by 3.0 percent during the same period.
Exports from China to major trading partners such as the European Union, the United States, and Japan all declined during the first ten months of 2023. In October, China’s trade surplus was US$56.53 billion, a 30.8 percent reduction year-over-year. China’s exports have now fallen for six consecutive months.
During the first ten months of 2023, China’s exports to the ASEAN group (China’s top trading partner) increased by 0.6 percent. Meanwhile, exports to the EU, the United States and Japan (China’s 2nd, 3rd, and 4th-ranked trading partners), fell by 5 percent, 9.9 percent and 2.9 percent, respectively.
China’s foreign direct investment (FDI) deficit in the third quarter of 2023 was US$11.8 billion. This is the first time that China’s foreign exchange regulatory authorities have recorded an FDI deficit since they began compiling data in 1998. As the United States has ramped up its technology blockade against China, companies have accelerated the relocation of their supply chains away from China, replacing China’s position in the supply chain with countries in Southeast Asia or Mexico. Due to Mexico’s proximity to the North American market, even Mainland China companies have been moving production to Mexico.
Currently, more than US$1 trillion from Wall Street private equity funds is locked up in China, and Chinese companies like Evergrande have refused to repay their bonds. Such debt defaults have greatly shaken foreign businesses’ confidence and willingness to invest in China. Many U.S. investment banks worry that their investments may need to be written off as donations.
Source: RFA, November 7, 2023