Resilient exports keep 2023 trade and growth hopes high

China's foreign trade is expected to keep growing on the back of domestic economic recovery and improvement in global demand, lawmakers attending the 14th National People's Congress and industry experts said on Tuesday.

The better-than-expected export performance during the first two months of the year has mitigated market worries over prospects for the sector this year, they said.

Their comments followed official Customs data that China's total imports and exports declined 0.8 percent year-on-year to 6.18 trillion yuan ($890 billion) during the first two months of the year.

Exports increased 0.9 percent from a year earlier to 3.5 trillion yuan while imports declined 2.9 percent to 2.68 trillion yuan during the period, resulting in a trade surplus of 810.32 billion yuan, which expanded 16.2 percent on a yearly basis, the General Administration of Customs said.

"The January and February export figure was above market expectations while that for imports was below expectations," said Zhou Maohua, a macroeconomic analyst at China Everbright Bank.

"The resilience of exports reinforced market confidence in 2023 export prospects," he said, adding he believes foreign trade will continue to support overall economic growth in China during the first quarter.

Zheng Houcheng, director of the Yingda Securities Research Institute, attributed the export performance mainly to the soft overseas demand and high comparison base of last year. He said exports in March are likely to continue to face pressure from weak external demand.

Zhou forecast that China's exports will likely gain growth impetus on expected overseas demand rebound in the second half of the year, when interest rate hikes in developed economies are seen slowing or ceasing altogether.

According to the GAC, China's general trade increased 1.2 percent year-on-year to 4.01 trillion yuan during the first two months, contributing to around 65 percent of the country's overall foreign trade value, which was 1.3 percentage points higher compared with that a year ago.

Related exports rose 3.1 percent to 2.24 trillion yuan while imports fell 1.2 percent to 1.77 trillion yuan.

Sector-wise, exports in the processing trade sector declined by 6 percent to 768.16 billion yuan, while related imports plummeted 18.3 percent to 395.87 billion yuan.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said as the Chinese economic recovery picks up speed, exports will have a firmer footing while imports are also likely to rise on the basis of domestic demand expansion.

Industry observers said China is expected to further tap the potential of new business formats and the Regional Comprehensive Economic Partnership agreement, which took effect last year, to shore up foreign trade.

Li Kuiwen, a deputy to the 14th NPC and head of the Guangdong Office of the General Administration of Customs, said Customs authorities in Guangdong province, one of China's export hubs, will implement supportive measures to promote high-quality development of new business formats, such as cross-border e-commerce. They will also actively optimize the business environment at ports to promote stable and high-quality foreign trade.

Currently, all 21 prefecture-level cities in the province have been approved as comprehensive pilot zones for cross-border e-commerce, he said.

Li Donglin, a deputy to the 14th NPC and chairman of CRRC Zhuzhou Electric Locomotive Research Institute Co Ltd in Hunan province, a subsidiary of State-owned CRRC Corp Ltd, said the company will deploy more resources to develop RCEP markets this year.

In addition to exporting railway-related products to the RCEP region, the company plans to enter the wind power market in Vietnam and provide more railway equipment maintenance services for its clients in Malaysia in 2023.