Chinese export volumes have shot past estimates so far this year, boosted by deeper trade ties with Russia and other emerging markets, the Financial Times reported.
Volumes rose 7.1% in the first two months of 2024, eclipsing a Reuters poll forecast of 1.9%. It’s a good sign for Beijing, whose economy was hit with weak export earnings last year, amid other struggles.
Closer trade ties with Russia helped drive the pickup. Through January and February, Chinese exports to the country rose 12.5%, while bilateral trade hit a total of $37 billion.
“China and Russia have created a new paradigm of major-country relations,” Foreign Minister Wang Yi said during the National People’s Congress meeting. “The two sides’ political mutual trust continues to deepen. Russian natural gas is reaching households in China, while Chinese cars are driving on the streets of Russia.”
To the alarm of the West, the two countries have strengthened ties since Moscow’s 2022 invasion of Ukraine, with bilateral trade hitting a record $240 billion last year.
Trade with China has offered Russia some breathing room amid a wave of war-related sanctions, providing it with a new market to unload energy products that have otherwise been rejected by the US and its allies.
On China’s end, its latest spike in exports may also signal a shifting growth strategy. As the country looks to reduce its massive reliance on property sector growth — an industry currently in default — emphasis is instead growing on manufacturing.
More production means that exports are likely to rise, which China Beige Book CEO Leland Miller noted could lead to international tensions and trade wars in 2025.
In the meantime, China’s trade with the US rose 0.7% so far this year, and Wang acknowledged that Beijing’s relationship with Washington remained “critical.”
However, he argued that the US has an obsession with restraining China: “It is unacceptable that certain countries are at the table while others are on the menu,” he said.
In part, that may be as the US is pursuing tighter enforcement of its sanctions against Russia, a strategy that has come to encompass Chinese entities. Fear of secondary sanctions has caused three of China’s four state banks to halt payment transactions with Russian institutions.
