Don’t let anybody tell you that globalization is dying—at least, not yet.
Global trade economists obsess over consumer demand and rising protectionism in the U.S. and Europe, but this week’s release of Chinese trade statistics shows that other markets might soon be catching up in relevance.
The Promise of Other Markets
China’s exports to Latin America, Africa and India all rose by double-digits in the first two months of 2024. China releases its January and February trade data together every year to make up for the dip corresponding with Chinese New Year, which can fall in either month. The unique two-month batch of trade data is one of the spring’s most hotly-anticipated economic releases.
Overall, China’s exports increased 7.1% year-on-year in January and February to $528 billion, and the country’s imports rose 3.5% to $402.9 billion. The relatively strong performance surpassed analysts’ expectations thanks to a recovery in global consumer demand, an expansion in high-tech investment and artificial intelligence, and a low baseline because of Covid shutdowns in 2022 and 2023. It also matched with encouraging economic data from other regions of the world, including South Korea, Germany, and Taiwan.
A Slump in Europe
Exports to the U.S., China’s largest single trade partner, increased 5% to $73.4 billion, and exports to ASEAN countries rose 6% to $82.7 billion. The negative outlier among the top trading partners was the European Union. Exports to the EU fell 1.3% to $78.3 billion.
The biggest surprise was how much China exported to countries that rank in the middle or at the bottom of the world’s economic league table. Exports to Latin America rose 20.6% (and were up 33.8% to Brazil) to $40.9 billion, shipments to India rose 12.8% to $19.5 billion, and sales to Africa rose 21% to $28.8 billion.
“As our export commodities are climbing up the value chain, coupled with China’s proactive opening up and the expansion of import market opportunities, China has great potential both in import and export,” said minister of commerce Wang Wentao at a press conference this week. Wang pointed out that China’s export reboot has become increasingly reliant on what he called the “big three”: Electric vehicles, lithium-ion batteries, and solar panels.
Classic Manufacturing Rebounds
Thanks to demand driven in part by consumer in Latin America, Africa and India, China’s traditional manufacturing consumer staples are enjoying a resurgence. Exports of footwear, for example, rose 14.4% to $8.7 billion. Exports of toys increased 15.9% to $5.7 billion. And its heavy industrial sector continued to hum. Sales motor vehicles rose 12.6% to $15.7 billion, and exports of ships rose 173.1% to $6.8 billion. Exports of mobile phones increased 12.8% to 123.7. million by quantity, and dropped 18.2% to $19.3 billion by value. Exports of rare earths rose 18.7% by quantity to 8,773.9 tons. By value, they shrank 44% to 81.8$ billion, demonstrating by their price decline that they are perhaps not as rare as some would have you believe.
Asian Exporters March On
On the import side, the U.S. and Europe continued to lose out to Asian partners. Imports from the EU fell 9.4% to $39 billion, and from the U.S. dropped 9.7% to $26.1 billion. Imports from ASEAN countries increased 3.3% to $57 billion, and from Latin America increased 8.1% to $41.7 billion. Imports from India increased a whopping 34.7%, but from a lower baseline of $3.7 billion. Imports fell across a wide variety of categories and were saved only by big purchases of mechanical and electrical products, up 7.7% to $137.2 billion; iron ore, up 22.8% to $27.5 billion; and crude oil, up 2.8% to $51.3 billion.
The export resurgence has further boosted China’s trade surplus with the rest of the world. It was $125.1 billion in the first two months, up from $116.9 billion over the same period in 2023, and a new record.