Chinese foreign trade starts new year in a slump

China’s exports and imports fell during the first two months of 2023, according to official data Tuesday, hit by sluggish overseas demand, a massive Covid wave and market concerns over rising US tensions.

The country’s exports in January and February tumbled 6.8 per cent on-year, though that was an improvement on the 9.9 per cent drop in December, customs records showed.

Imports fell 10.2 per cent during the same period -- worse than the 7.5 per cent drop recorded in December.

The latest figures come as the threat of recession looms over the US and European economies, where galloping inflation is contributing to a sag in demand for Chinese products.

Turbulence in China-US relations continued to weigh on trade between the world’s two leading economies, with Chinese exports to the United States down 21.8 per cent in January-February.

US imports to China, meanwhile, fell 5.0 per cent.

Beijing is “clearly aware of the challenge the economy faces from weak global demand and the risk of supply chains relocating away from China”, said economist Zhiwei Zhang of Pinpoint Asset Management.

This is why authorities are making it a “top priority” to “boost confidence among private and foreign investors in China”, added Zhang.

The country’s customs department typically releases combined trade data for the first two years of the month owing to the lengthy annual Lunar New Year holiday.

The trade data come after China’s outgoing Premier Li Keqiang on Sunday said the country’s economy would expand “around five per cent” this year, slightly below what analysts had predicted.

The world’s second-largest economy grew three percent last year, missing its target of around 5.5 percent under the impact of strict Covid-19 containment policies and a property crisis.