The China Thread

[Cooper]

China reports bumper April exports ahead of crucial trade talks with US

Trade data shows a rise in shipments to south-east Asia and Europe offsets drop to America

www.ft.com

China’s exports grew sharply in April despite Donald Trump’s “liberation” day tariffs on shipments to the US, strengthening Beijing’s hand ahead of crucial trade negotiations due to start this weekend.The strong performance came as Chinese companies diverted trade flows to south-east Asia, Europe and other destinations following the imposition of prohibitively high tit-for-tat tariffs between the world’s two largest economies.

Heron Lim, an economist at Moody’s Analytics, said that, while China’s trade with the US dropped 21 per cent year-on-year in April, it rose by an equal percentage with south-east Asian nations and 8 per cent with the EU.“The largest increases in outbound shipments went to Indonesia, Thailand and Vietnam,” Lim said.

 

[Samseau]

China reports bumper April exports ahead of crucial trade talks with US

Trade data shows a rise in shipments to south-east Asia and Europe offsets drop to America

www.ft.com

These are all places that ship their stuff to the USA. China is off-loading their excess inventory while they still can to third parties. Third parties are hoping their countries can work out a deal for lower tariffs with the USA. Meanwhile factory orders in China have stopped and 1/3 of the economy is turned off until tariff action happens.

 

[Cooper]

These are all places that ship their stuff to the USA. China is off-loading their excess inventory while they still can to third parties. Third parties are hoping their countries can work out a deal for lower tariffs with the USA. Meanwhile factory orders in China have stopped and 1/3 of the economy is turned off until tariff action happens.

If a third of the Chinese economy was really shut down, we would certainly have known about it from sources like the ones I have cited above. That is simply not a realistic assessment.

ASEAN has 700 million people and economies that are growing at an average of 5%, with growing middle classes and fast-growing demand for the kinds of products you see at Walmart. Demand for Chinese goods has also been growing fast in large markets like Russia (where China has replaced Europe and the US), Brazil or even a country hostile to China like India, where for instance the majority of cellphones sold are Chinese.

China is the leading supplier and exporter to most countries in the world today representing around 7 billion people. China also is the largest market today in just about every sector including automotive, consumer electronics, household appliances, phones, furniture etc and total Chinese exports represent less than 20% of their GDP, and the US represents less than 1/6th of these exports:

China Exports, percent of GDP - data, chart | TheGlobalEconomy.com

China: Exports of goods and services as percent of GDP: The latest value from 2023 is 19.74 percent, a decline from 20.79 percent in 2022. In comparison, the world average is 45.64 percent, based on data from 154 countries. Historically, the average for China from 1960 to 2023 is 14.79 percent...

www.theglobaleconomy.com