China trade: economic recovery tested as exports, imports dip further at start of 2023

China’s trade continued its recent decline at the start of the year, highlighting the challenges facing Beijing as it struggles to lift its economy after three years of zero-Covid.

Exports fell by 6.8 per cent from a year earlier to US$506.3 billion in combined figures for the first two months of 2023, data released by China Customs on Tuesday showed.

Imports, meanwhile, also continued their downward trend in January and February, falling by 10.2 per cent from a year earlier to US$389.42 billion.

“[The drop in China’s exports] is in line with market expectation,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “China’s economy will have to depend more on domestic demand this year.”

China’s exports sector may remain suppressed for the rest of the year, and it is likely to be a drag on economic growth, he added.

Its trade figures for January and February are combined to smooth out the impact of the Lunar New Year holiday, which falls at different times during the two months in different years.

The data is the first major economic indicator released since China fully relaxed its zero-Covid policy and restarted its economic engine at the beginning of the year.