China trade: shipments hit ground running in 2024, but hunt is on for new export stalwarts

China’s exports rose 7.1 per cent in January and February compared to a year earlier, while imports went up 3.5 per cent, both well in excess of projections

Country is relying on high-demand exports to fuel growth and fulfil targets, with premier vowing to bolster trade in his government work report

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China’s exports rose by 7.1 per cent in combined figures for January and February compared to a year earlier. Photo: Xinhua

Published: 11:12am, 7 Mar 2024Updated: 6:26pm, 7 Mar 2024

China needs more durable export commodities – cut from the same cloth as its innovations in new energy – to hedge against geopolitical pressures and sustain growth in 2024, analysts said, even with shipments beating market expectations in the first two months and a record trade balance on the books.

Exports rose by 7.1 per cent from a year earlier to US$528 billion in combined figures for January and February, and imports increased by 3.5 per cent according to customs data released on Thursday.

Both readings surpassed market forecasts by a wide margin, thanks in part to a low base in the same period last year – a time when the country was shaking off the lingering effects of pandemic controls.

“China’s commodities imports are particularly strong, a sign that domestic demand is not showing a significant downturn,” said Ding Shuang, chief Greater China economist at Standard Chartered Bank.

“Net exports, which previously had a negative contribution to gross domestic product (GDP), are expected to reach around zero this year, and exports will at least no longer drag down economic growth in 2024,” Ding said.

China has been grappling with a number of thorny economic issues, including a property market downturn, mounting local government debts, deflationary risks and geopolitical tensions, collectively eroding confidence among overseas investors and the domestic private sector.

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Chinese Premier Li Qiang delivers his first work report amid concerns about state of the economy

Yet the rapid growth fuelled by China’s “new three” – electric vehicles (EVs), lithium-ion batteries and solar panels, all marquee products for the global energy transition – is one source of optimism that these headwinds can be offset.