China, Russia trade surges amid Ukraine crisis, but ‘alarm’ as overall export growth slows

Bilateral trade between China and Russia rose by 38.5 per cent to US$26.4 billion from the previous year in combined figures for January and February

Overall, China’s exports grew by 16.3 per cent in January and February from a year earlier, while imports grew by 15.5 per cent

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Overall, China’s exports grew by 16.3 per cent in January and February from a year earlier, while imports grew by 15.5 per cent. Photo: EPA-EFE

Published: 2:09pm, 7 Mar 2022Updated: 4:51pm, 9 Mar 2022

China’s trade with Russia surged at the start of the year, but “alarming” slowing overall export growth amid various headwinds have increased the pressure on Beijing to introduce policies to meet its new economic target, analysts said.

Bilateral trade with Russia rose by 38.5 per cent to US$26.4 billion from the previous year in combined figures for January and February, which represented the highest growth rate for the first two months of the year since 2010.

But overall exports grew by only 16.3 per cent in January and February from a year earlier to US$544.7 billion, which beat expectations but was down from December’s growth of 29.9 per cent.

Exports are a key driver for China’s economy and will play a role in reaching the gross domestic product target of “around 5.5 per cent”, which was set on Saturday by Premier Li Keqiang.

With the export growth slowing down, the pressure on the government rises further to loosen policies to achieve the ambitious growth target of 5.5 per cent

Zhang Zhiwei

“Export growth slowed in the first two months this year. This is alarming as exports was a main driver for economic growth last year when investment and consumption were both muted,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.

“With the export growth slowing down, the pressure on the government rises further to loosen policies to achieve the ambitious growth target of 5.5 per cent.”

Trade data for January and February is combined to smooth out the impact of the Lunar New Year holiday, with the week-long holiday starting on January 31 this year.