China’s exports to keep cooling despite spike in heater sales to Europe and still-weakening yuan
- The trade boom that China’s economy enjoyed early in the pandemic is waning, as not even the appeal of a depreciated Chinese currency can offset global demand dynamics
- Reviving private consumption and boosting business investment are seen as crucially important, but China’s restrictive zero-Covid policy still looms large
China’s export outlook appears muddled as the world’s major economies brace for a global recession, while a weakening yuan and a spike in heater exports to Europe are doing little to boost orders at large.
As families in Europe weigh up how they will cope with winter temperatures amid an intensifying energy crisis, they have been buying large numbers of electric heaters and heated blankets from China.
In the first eight months of this year, the number of heated blankets exported to the European Union, Britain, Iceland and Norway surged 62 per cent compared with the same period last year, while the number of heaters exported to the EU jumped 47 per cent, according to the Post’s calculations using China’s customs data.
But the orders of small household appliances are minute compared with the vastness of China’s export industry and can serve to offset only a modicum of the dwindling demand momentum, experts say.
“Similar to what we saw during the pandemic, pockets of consumption resilience could provide a pillar of support to Chinese exports,” said Nick Marro, lead analyst for global trade at the Economist Intelligence Unit (EIU).
However, European economies are now being constrained by tightened discretionary household spending, higher inflation, and likely shocks to routine factory operations and supply-chain disruptions, and the subsequent slowdown in business activity will dampen demand for many Chinese goods next year, Marro added.