Will China’s belt and road plan, Asean provide silver lining as US step ups de-risking and trade prospects dim?
- US imported 25 per cent less from China in the first seven months of the 2023, year on year, the equivalent of around US$203 billion in goods
- Beijing has stepped up diversification efforts, with countries involved in its Belt and Road Initiative becoming more important export locations
Amid ongoing Western efforts to de-risk their supply chains away from China, moves that have led to disappointing trade with the likes of the United States and the European Union, a silver lining appears to have emerged.
The proportion of China’s trade with the US and European Union fell significantly in the first half of the year against a backdrop of Western moves to avoid perceived choke points in China amid ongoing geopolitical tensions.
Weak global demand and a broad economic slowdown have also been blamed for faltering exports, not only in China, but in other major global trade hubs, including Vietnam and India.
In response to the shifting global supply chain, Beijing has stepped up diversification efforts closer to home and further afield, repeating a narrative that countries involved in its Belt and Road Initiative are becoming more important export locations, despite the West’s calls to de-risk from China.
And exports to countries along the belt and road plan’s trade routes grew by 7.4 per cent in the first seven months of the year, according to the yuan-denominated figures released by China’s General Administration of Customs.
In the same period, exports to the European Union dropped by 2.6 per cent, while shipments to the US fell 13 per cent.