China’s foreign trade soars in the first five months of 2024

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China, Economic recovery

China’s foreign trade in goods from January to May 2024 reached a total of 17.5 trillion yuan ($2.42 trillion), marking a significant year-on-year increase of 6.3 percent. This impressive growth underscores China’s robust economic recovery and strong trade performance, which continues to align with market expectations. Data released by China’s General Administration of Customs (GAC) highlights this positive trend, reflecting the nation’s production strengths, market potential, and diversified trading partnerships.

In the first five months of 2024, China’s exports surged by 6.1 percent year-on-year, reaching 9.95 trillion yuan. Imports also saw a significant rise, totaling 7.55 trillion yuan with a yearly increase of 6.4 percent. These figures demonstrate a balanced growth in both outbound and inbound trade, suggesting a healthy and dynamic trade environment.

The growth in trade figures was particularly pronounced in May 2024, with a notable yearly increase of 8.6 percent, bringing the monthly total to 3.71 trillion yuan. Exports in May alone amounted to 2.15 trillion yuan, reflecting an impressive year-on-year surge of 11.2 percent, while imports grew by 5.2 percent to 1.56 trillion yuan. This accelerated growth rate in May points to a strengthening momentum in China’s trade sector.

A significant portion of China’s export growth can be attributed to the strong performance of electromechanical products. In the first five months of 2024, exports of these products totaled 5.87 trillion yuan, up 7.9 percent from the previous year, and accounted for 59 percent of the country’s total exports. This sector’s growth underscores China’s shift towards exporting more advanced and technologically sophisticated products, moving away from the traditional focus on primary goods processing.

Integrated circuits and automobiles were standout performers within the electromechanical category. Exports of integrated circuits saw a substantial year-on-year increase of 25.5 percent, totaling 444.73 billion yuan. Similarly, automobile exports reached 329.7 billion yuan, marking a 23.8 percent increase. These figures highlight China’s growing competitiveness in high-tech and high-value-added sectors.

China has been actively upgrading its industrial structure, focusing more on advanced and technological products. This strategic shift is not only enhancing the country’s export competitiveness but also contributing to its economic resilience. According to Cong Yi, a professor at the Tianjin School of Administration, this transition reflects China’s ability to adapt to changing global trade dynamics and maintain a strong export performance despite external challenges.

Li Changan, a professor at the Academy of China Open Economy Studies of the University of International Business and Economics, echoed this sentiment. He pointed out that the strong export figures for electromechanical products and other high-value commodities are indicative of China’s successful high-quality opening-up strategy.

Increased imports of bulk commodities further illustrate China’s stable economic development and growing domestic demand. This trend indicates that the country’s consumption and production needs are driving higher import volumes, suggesting a balanced and sustainable economic recovery. The import growth rate for May 2024 alone underscores this trend, reflecting China’s capacity to support its production and consumption through robust import activities.

The export growth rate of ships and new-energy vehicles also stood out, with ship exports doubling year-on-year and new-energy vehicle exports increasing by 26.3 percent. These sectors represent China’s strategic focus on green and sustainable industries, further diversifying its export portfolio and enhancing its global trade presence.

China’s trade with its key partners continues to flourish, reflecting the country’s strategic emphasis on diversified trading relationships. ASEAN remained China’s largest trading partner from January to May 2024, with total trade value reaching 2.77 trillion yuan, up 10.8 percent year-on-year. This partnership accounted for 15.8 percent of China’s total foreign trade, underscoring the significance of regional economic cooperation.

Trade with Belt and Road Initiative (BRI) partner countries also showed strong growth, totaling 8.31 trillion yuan, a yearly increase of 7.2 percent. This diversified trade strategy helps China mitigate risks associated with “decoupling” practices by the US and other Western countries. By strengthening ties with a wide array of partners, China ensures a stable and resilient trade network.

The Regional Comprehensive Economic Partnership (RCEP) has played a crucial role in bolstering regional economic development. Enhanced cooperation with ASEAN countries under the RCEP framework exemplifies the positive impact of this trade pact. Multiple Chinese cities have recorded strong foreign trade figures with RCEP member countries in 2024, benefiting from the full implementation of the world’s largest trade agreement.

Looking ahead, observers remain optimistic about China’s foreign trade prospects. Li Changan expects more targeted policies to be rolled out, further optimizing commodity structures and diversifying trading partners. These strategies will help China navigate increasing trade barriers and other external challenges.

In addition to goods, China’s services trade also saw substantial growth. From January to April 2024, the total import and export of services increased by 16.8 percent year-on-year, totaling 2.43 trillion yuan. Travel services, a major sector within services trade, maintained strong growth momentum with imports and exports amounting to 660.03 billion yuan, up 48.6 percent year-on-year.

China’s foreign trade performance in the first five months of 2024 demonstrates the country’s robust economic recovery and strategic adaptability. With a balanced growth in exports and imports, strong performance in high-tech sectors, and diversified trade partnerships, China is well-positioned to sustain its trade momentum. The optimistic outlook for the coming months suggests that China’s trade sector will continue to thrive amid global economic uncertainties.

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