By Yunbo Zhou
When China, the world’s largest trading nation, announced a re-opening to the world late last year after its heavy zero-covid lockdowns, many exporters from Argentina to South Korea rejoiced at the news.
China’s multiple lockdowns complicated supply chains, adding pressure to already existing inflation across the world. In addition to its role as a manufacturing engine of the world economy, China is also a major demand engine for the world’s goods. So, when China re-opens, many markets from soybeans to oil to luxury goods will get a jolt
Which countries/regions send the most exports to China?
The below is a top 5 list from 2021
- Taiwan
- South Korea
- Japan
- United States
- Australia
China imported more than $3 trillion of goods in 2021.
| Source | China Imports – billion $ | % of total |
| Taiwan | 251.46 | 8.1 |
| South Korea | 213.45 | 6.9 |
| Japan | 206.15 | 6.6 |
| United States | 180.83 | 5.8 |
| Australia | 162.18 | 5.2 |
Source: IMF Direction Of Trade Statistics; Percentages based on author’s calculations.
As for China, it is also the world’s largest exporter. China exported more than $3.5 trillion worth of goods in 2021. These are the top 5 markets for Chinese goods in 2021.
- United States
- China P.R Hong Kong
- Japan
- South Korea
- Vietnam
| Country/Region | China Exports – billion $ | % of total |
| United States | 577.63 | 16.2 |
| Hong Kong | 351.64 | 9.8 |
| Japan | 165.90 | 4.6 |
| South Korea | 150.55 | 4.2 |
| Vietnam | 137.95 | 3.8 |
Source: IMF Direction of Trade Statistics; percentages based on author’s calculations
As for the year 2022, China ended the year with a 3% GDP growth rate – significantly lower than recent standards over the past three decades. Recently, China’s National People’s Congress (NPC) met in Beijing. On March 5th Li Keqiang, the country’s outgoing prime minister, opened the congress with his annual “work report” and confirmed a GDP growth target of “around 5%” in 2023, lower than many external forecasts.
The 5% growth target for this year should be seen as a base line rather than a goal, according to some analysts who said investors shouldn’t be too discouraged. Zhang Fushen, a senior analyst from Shanghai PD Fortune Asset Management, commented that the biggest takeaway is “no strong stimulus this year,” suggesting that authorities are satisfied with the pace of recovery.
“The growth target may seem underwhelming,” Wei Yao, an economist from Societe Generale SA was quoted as saying in Bloomberg, “but we see it as a strategy of ‘aiming low and overachieve’ by the upcoming new government team, rather than lack of confidence among policymakers” Yao also said that he thought “the government report confirmed a more pragmatic policy stance toward real estate and internet platforms.”
Economic Growth (GDP) for China in 2022 was 3.0%.
Forecasted Economic Growth for China in 2023
| China Forecast Economic Growth | 2023 |
| NPC Congress | ~5% |
| IMF | 5.2% |
| Fitch Ratings | 5% |
| World Bank | 4.3% |
| JP Morgan | 4% |
| Goldman Sachs | 6.5% |
On a systemic level, China’s economy matters deeply to the global economy, but recent reports suggest that China’s recovery will be driven more by domestic consumption and will have a less outsized effect on the global economy.
As the Wall Street Journal reported:
“Early indications suggest the biggest effects of China’s rebound will be felt at home, rather than abroad. Official data, including business surveys, sales and public transit numbers, suggest the strongest growth will come from service industries such as restaurants, bars and travel.”
“That means that while an accelerating China is good news for fragile global growth, especially as the U.S. and Europe are set to slow, the direct effects of its revival will likely be less pronounced elsewhere than in the stimulus-led expansions of the past.”
Still, one can expect the world to be watching China’s growth and trade numbers closely.
