The conversation about global trade often leaves out the world’s fourth biggest economy and third top exporter and importer, but Germany is poised to play an even bigger role this decade as China and the U.S. remain locked in a trade war.
In August, Chinese exports to Germany jumped a whopping 21.5% to $10.1 billion. The surge was part of another strong month for Chinese exports, which have rallied in 2024 despite a wave of tariff actions from Washington to Brussels to New Delhi. Total exports from China rose 8.7% to $308.6 billion.
All year, Beijing has been touting its export growth, and analysts expect the government to push the move further. “The continued strong run of exports may actually delay near-term policy support, and we continue to expect bolder measures to be released in Q4,” said Nomura analysts in a report.
Germany is China’s tenth biggest source of imports, and it’s China’s 7th biggest export market. But as China ramps up its automobile industry, especially in the domain of electric vehicles, its supply chain with car-power Germany has taken on an increased role. In Frankfurt this week, over 800 Chinese car companies including Geely, Hongqi, and GAC International showed up at a trade fair in Frankfurt.
According to TDM, China’s top exports to Germany in the first seven months of 2024 were electronics ($18.7 billion), machinery ($11.9 billion), vehicles ($3.5 billion), furniture ($2.9 billion), and optical and photographical equipment ($2.3 billion).
At the same time, Chinese imports from Germany fell 17% in August to $8.1 billion, but that could be an outlier. The country’s trade deficit with China is only a fraction of the U.S.’s.
By comparison with Germany, sales to the U.S. increased 5.1% to $47.3 billion and those to ASEAN nations increased 9.6% to $46.6 billion. Overall exports to the European Union rose 13.8% to $46.8 billon.
One Chinese export market that is also growing strong is Brazil. Chinese exports rose 42.9% to $7.9 billion. According to TDM, China’s top exports to Brazil in 2024 have been electronics, machinery, and cars. The fastest-growing segments has been the cars.
Shipments of motor vehicles rose 32.6% in August to $10.9 billion. However, shipments of automotive components and parts increased only 6.7% to $8.1 billion. This year, the EU and U.S. have imposed new duties on imports of Chinese electric vehicles. Last month, Canada slapped a 100% tariff on Chinese EVs. India is bumping up its import tax on Chinese steel.
Exports of rare earths fell 1.1% by quantity to 4,723 tons and 36.7% by price to $4.1 billion. The falling price highlighted a core truth about rare earths. It’s a tiny niche market.
Sales of consumer staples continued to struggle, suggesting that global consumer demand is still weak. Exports of furniture fell 4% to $4.8 billion, and sales of toys dropped 8% to $4.1 billion. Exports of high-tech products, however, rose 9.6% to $72.8 billion, and shipments of mobile phones rose 17.1% to $8.4 billion.
On the import side, total purchases increased only 0.5% to $217.6 billion. Of particular note is that China has been cutting its purchases of essential fuels and commodities, suggesting a bleaker outlook for the rest of the year. Imports of crude petroleum dropped 7% by quantity to 49.1 million tons. (By value, they fell 5.4% to $29.4 billion.)
Imports of coal are finally leveling off. Shipments to China by quantity rose only 3.4% to 45.8 million tons. (By value, they rose 6.9% to $4.4 billion.) Imports of high-tech products increased 13.7% to $65.1 billion. Imports of iron ore declined 9.9% to $10.5 billion.
One good sign for the future of global trade: Chinese exports of ships rose 63.8% in August to $4.1 billion. By quantity, they spiked 41.6% to 497.