China’s Shenzhen sees trade swell, with ‘impressive’ volumes to the US amid tech war
- The first two months of 2024 were lucrative for the southern tech hub even as some of its biggest private players remain under sanctions imposed by Washington
- Asean shipments dominated trade while sales to the United States saw a year-on-year surge of 62 per cent in January and February
China’s southern tech hub saw a big rise in exports during the first two months of the year, buoyed by electric-vehicle demand and an influx of deals with countries included in the Belt and Road Initiative.
And analysts say the promising trade figures reported by Shenzhen could bode well for the central government’s goal of growing China’s economy by around 5 per cent this year while fending off geopolitical obstacles and Western tech curbs.
The value of goods shipped from the city during the two-month period reached 441.4 billion yuan (US$61.3 billion), which marked a year-on-year increase of 53.1 per cent, according to customs figures released on Tuesday. Meanwhile, the value of imports rose by 31.9 per cent, to 233.74 billion yuan.
The combined total value of foreign trade, at just over 675 billion yuan, was up 45 per cent from a year prior in the home base of US-sanctioned telecoms leader Huawei Technologies, tech giant Tencent, electric-vehicle firm BYD and drone maker DJI.
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The 10-member Association of Southeast Asian Nations (Asean) became Shenzhen’s largest trading partner during the year’s first two months, as the trade value rose 58.1 per cent to 106.92 billion yuan. It was followed by Hong Kong, the United States, Europe and Taiwan.
Sales to the US rose 62.4 per cent, year on year, while Europe-bound shipments rose 20.9 per cent, customs figures indicated, without giving the total values.
The city’s trade with countries participating in the belt and road, which links economies into a China-centred trading network, reached 249.1 billion yuan, up 57.8 per cent from the same period in 2023.
It is indeed impressive that exports to the US rebounded so much
Private firms led the growth, as their trade value jumped 72.4 per cent, year on year, and their proportion of all trade with Shenzhen increased by 11.4 percentage points to 71.6 per cent.
“It is indeed impressive that exports to the US rebounded so much,” said Peng Peng, executive chairman of the Guangdong Society of Reform, a Guangzhou-based think tank. “Usually, growth in exports to Asean is accompanied by a decline to the United States.”
Peng said the city’s export rebound was likely to boost business confidence and could suggest less pain from supply-chain shifts in the short term.
“The next step is to see how the geopolitical landscape changes after the US presidential election or after the Russia-Ukraine war,” he said.
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Shenzhen is China’s top exporting city and home to 2.01 million enterprises – more than 99 per cent of which are small and medium-sized firms. The city has also found itself caught up in the battle for tech supremacy between Beijing and Washington.
The administration of US President Joe Biden has put some major Shenzhen companies – including Huawei, DJI, semiconductor designer Corad Technology and facial-recognition technology supplier Cobber – on its export blacklist.
Washington’s tech-containment efforts and attempts to reduce exposure to China’s supply chains have compounded the external uncertainties facing the world’s second-largest economy this year.
Among Shenzhen’s exports in January and February, mechanical and electrical products accounted for 295.5 billion yuan of the value – a year-on-year increase of 30.2 per cent.
BYD alone exported 36,700 new-energy vehicles worldwide in the first two months of this year, up 47.22 per cent from a year earlier, according to Liu Feng, one of its managers, as quoted by the state-run Shenzhen Special Zone Daily.
That demand helped drive sales of related components and materials, the newspaper reported.
Shenzhen’s trade volume rose with all of its top-10 export destinations, which accounted for 73.9 per cent of the total, in January and February.
