The value of Chinese exports in U.S. dollars expanded by 1.5 percent last month compared to April 2023, according to preliminary data published by China’s customs administration on Thursday.
This is cause for some optimism after the 7.5-percent year-on-year drop in March, a seven-month low. It also continues the general upward trend for shipment volumes since November saw the reversal of half a year of sharp declines following a brief post-pandemic bump.
Exports are among the green shoots that have sprouted in recent months in the year of general economic malaise seen since China dropped its strict “zero-COVID” anti-pandemic measures in December 2022.
The world’s second-largest economy continues to be weighed down by its ongoing property market slump, high public debt, deflationary pressure, and high youth unemployment.
Thursday’s report is another sign China’s exports are still a long way from the impressive export volumes it enjoyed at the height of the pandemic.
China was able to contain its initial outbreaks relatively quickly.
The country—like the rest of the world—took an economic hit in early 2020 after the World Health Organization declared a pandemic and borders closed.
However, the Chinese economy weathered the storm relatively well between the end of the lockdown in Wuhan, where the virus was first detected, and the severe outbreak of the Omicron variant of the virus in late 2022.
China posted 2.2 percent GDP growth in 2020, higher than the -2.2. percent reported by the United States and the -2.7 percent reported globally, though a far cry from the pre-pandemic expansion levels of 5 percent or more.
“The services sector in particular was hit hard. In comparison, exports did relatively well,” Bert Hofman, a professor at the National University Singapore’s East Asian Institute, told Newsweek.
Photo-illustration by Newsweek/Getty
“First, because there was a lot of demand for pandemic-related goods, such as electronics and protective gear, of which China makes a lot,” Hofman said. “Second, because China gave strong support to manufacturing to keep production going. In contrast, many of its competitors suffered from production interruptions in those years.”
This support included measures like preferential tax policies to stimulate manufacturing as well as encourage foreign investment in the sector.
The Chinese embassy in the U.S. did not immediately respond to a written request for comment.
Lackluster domestic demand has spurred deflation in China, reducing the cost of exports, Pinpoint Asset Management chief economist Zhang Zhiwei pointed out in a Reuters report.
While this makes its goods more competitive, it has also led to protests of unfair competition, with China accused of flooding markets with low-cost petrochemicals, steel, and other products to alleviate its manufacturing glut.
The issue is a major sticking point in China’s relations with the U.S. and the European Union.
Beijing has repeatedly dismissed this overcapacity narrative, arguing detractors are trying to contain its economic development.
“The real purpose is to hold back China’s high-quality development and deprive China of its legitimate right to development. There isn’t a ‘China overcapacity,’ but a U.S. overcapacity of anxiety stemming from lack of confidence and smears against China,” Chinese Foreign Ministry spokesperson Lin Jian said during a press conference last month.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.