China’s exports grew more than expected in August 2024. According to data from the Beijing Customs Authority, exports rose by 8.7 percent year-on-year to the equivalent of 309 billion US dollars (about 280 billion euros). This means that Chinese exports have increased for the fifth month in a row. Imports increased by 0.5 percent. Analysts had previously expected exports to increase by 6.6 percent, while they expected imports to increase by 2.5 percent.
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Imports from Germany collapse
According to Chinese customs, there were particularly large deviations in trade with Germany in August 2024. While China’s exports rose by 21.3 percent, Chinese imports from Germany fell by 17 percent. Since the beginning of the year, China’s exports to Germany have risen by 3 percent year-on-year, while imports have fallen by 12.4 percent. “Weak domestic consumption in China and cautious investment in the private sector are putting pressure on demand for German goods, which companies in Germany are feeling,” commented Maximilian Butek, managing board member of the German Chamber of Commerce in East China.
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Falling prices
The trade figures for August show that Chinese companies are selling more goods abroad. But data from the Beijing statistics authority show that they are having to accept ever lower prices overall. Producer prices fell again in August by 1.8 percent compared to the previous year. Producer prices have been falling continuously for almost two years. While concerns about deflation are growing in China, other countries are alarmed by the flood of cheap exports. The EU and the USA recently imposed high tariffs on electric cars made in China.
Beijing has been planning to restructure the economy for some time. In the hope of creating new growth drivers, the expansion of technology sectors such as renewable energies and electromobility is being promoted. However, the new industries are struggling with overcapacity. Many companies have emerged in the electric car industry, which are now facing tough competition on the domestic market. Profits are difficult to make, among other things, because consumption is weakening due to economic uncertainty.
This is also why hopes are growing in China that it can support its own economy with a higher export share. A strategy that is not without risk, because it increases dependence. How sensitive the Chinese leadership reacts when things there could change to their disadvantage can be seen, among other things, in the dispute with the EU over higher tariffs on electric cars from China. Although the EU Commission had somewhat toned down the plans, the Chinese leadership protested sharply in August 2024 and threatened import tariffs on all cars.
(mfz)
