MNI INTERVIEW: China Exports To Grow In 2024 - Advisor

China’s trade should recover to pre-pandemic trends of single digit growth in 2024 driven by export demand for new manufactured goods, following flat results last year and despite western “overcapacity” accusations, a senior policy advisor to the National Development and Reform Commission told MNI.

Exporters this year will benefit from favourable tailwinds including the continued international recovery and growth with Association for Sea East Asian Nation (ASEAN) and Belt and Road Initiative countries, said Wu Sa, deputy-director of the Economics Institute at the Academy of Macroeconomic Research, a think tank with a focus on development issues under the National Development and Reform Commission.

Improved competitiveness in relatively high-tech products, such as solar panels and electric vehicles, will buoy exporters, Wu continued.

China’s total trade in Q1 hit CNY10.1 trillion, up 5% y/y, with exports of mechanical and electrical products up 6.8%, according to official data. Imports and exports grew 0.2% last year to CNY41.76 trillion, a slowdown from 2019’s pre-pandemic 3.4% increase and 2018’s 9.7% rise.

“The economy’s Q1 highlight was industrial manufacturing growth, largely driven by export demand, which should return to pre-pandemic trends this year,” he added, noting the complex international environment presented risks that will require policymakers to ensure sector support to maintain momentum.

China’s manufacturing investment is set to maintain strong growth throughout the year thanks to policy stimulus, adding to the potential for trade friction, advisors and analysts told MNI. (See MNI: Stimulus Seen Boosting China Manufacturing, Overcapacity)

Wu also told MNI Beijing will aim to contain spillover from the property market's decline into other sectors. (See MNI INTERVIEW: China To Contain Property Spillover - Advisor)

OVERCAPACITY

Wu believes Western concerns about alleged Chinese overcapacity were inappropriate, noting supply and demand were determined globally with countries holding differing industrial capacities based on their comparative advantages.

"China has gained market share in emerging industries fairly and because of competitiveness," Wu emphasised.

Last year, China's exports of new energy vehicles reached 1.2 million units, a y/y increase of 77.2%, while exports of solar cells reached 5.6 billion units, a 38.5% y/y increase.

Wu noted electric vehicle development represented an opportunity for all countries given the International Energy Agency estimated demand for new energy vehicles will triple by 2030.

“China’s new energy industry can make important contributions to global climate change and green low-carbon transformation,” Wu added.