General

Exports reflect a country's resource endowment, comparative advantages in economic industries, and are also influenced by international market demand. Against the backdrop of changes in the world, history, and times, stable imports from China by economies with strong purchasing power and willingness have become an important requirement for China to achieve sustainable development in foreign trade and create demand for domestic industries. It is also an important model for China to promote the optimization of global supply chain networks and support the upgrading and development of economic globalization. For a considerable period of time in the future, developed economies will undoubtedly remain important destinations for China's exports. According to import and export data, from January to February this year, developed economies accounted for 9 out of the top 15 export destinations in China, including the United States, Hong Kong, Japan, South Korea, the Netherlands (7th), Germany (8th), Singapore (10th), Australia (12th), and the United Kingdom (15th). China's exports to these destinations account for 45.3% of the total exports, and it is crucial to stabilize and expand its exports.

US inflation has slowed down

The United States is currently the world's largest consumer country, with stable and controllable residents and strong consumer willingness. In recent years, the US government has emphasized the development of the manufacturing industry and maintained a growing demand for components and intermediate products. Under the strong intervention of the Federal Reserve's continued interest rate hikes, the inflationary pressure in the United States has eased, and import demand continues to undergo structural adjustments. According to the United States Bureau of Economic Analysis, in February this year, the United States imported $262.2 billion in goods, a decrease of $5.8 billion compared to January. However, imports from China increased by $1.8 billion, reaching $38.2 billion, accounting for 14.6% of the United States' monthly imports. China, the European Union, and Mexico are the three major sources of trade deficits for the United States, with deficits of $25.2 billion, $18.1 billion, and $12 billion for the month.

The structural adjustment of imported goods in the United States shows stable demand in the consumer market and an increase in demand for energy imports. Import and export data shows that in the first two months of this year, the US food and beverage industry increased by 680 million US dollars year-on-year; Industrial products and materials decreased by $8.67 billion, with chemicals, steel, and wood decreasing by $2.08 billion, $1.67 billion, and $1.07 billion, respectively. Petrochemical products and coal increased by $1.97 billion and $500 million, respectively.

The United States is a major consumer of automobiles. In recent years, China's exports of automotive related products, including new energy vehicles, have significantly accelerated, but there is still great potential for exports to the United States. Based on February import and export data, the import value of complete vehicles and parts in the United States was 32.54 billion US dollars. Among them, the import value from China is 1.3 billion US dollars, accounting for only 4%, ranking behind Mexico, Canada, Japan, South Korea, and Germany. The United States has just started importing complete vehicles from China. In February, only $150 million (1.1%) of passenger cars imported from the United States came from China, and only $60 million (1.2%) of trucks, buses, and special vehicles came from China. In comparison, the import of automotive parts from China is $1.08 billion, accounting for a slightly higher proportion of 7.6%.

There are significant differences in resource endowments and market sizes among states in the United States. From the distribution of imported states in the United States, California and Texas are still the two largest importing states. Import and export data shows that in February, California's import value was $32.02 billion, while Texas's import value was $29.35 billion. In the first two months of this year, the proportion of imports from California and Texas was 14.1% and 12.2%, respectively. Among them, California has a higher proportion of industrial manufactured goods at 14.2%, while non industrial manufactured goods account for 13.8%; The proportion of Texas in the above two types of imports is similar, at 12.4% and 11.7%, respectively. In addition to California and Texas, there are two other states that account for over 5% of US imports, namely Illinois (7%) and Michigan (5.1%), with New Jersey and New York both accounting for 4.7% of imports. As a gathering and distribution zone of traditional industries in the United States, the proportion of industrial manufactured goods in Michigan is 5.5%, significantly higher than the 2.9% proportion of non industrial manufactured goods. Imported components and intermediate goods provide important support for its economic development.

There is a demand in Japan

Japan is a developed industrialized country with a large and relatively stable market demand. Japan has maintained its position as the world's largest importer of liquefied natural gas for decades and is also the largest net importer of food. Japan's per capita income has reached 43000 US dollars, and its consumer demand is diverse and diverse. In 2022, Japan imported $897.7 billion in goods, an increase of 16% compared to the previous year. In February of this year, Japan's imports achieved a year-on-year growth of 8.3%, slightly lower than the market expectation of 12.2%, and a slight decrease from the high-speed growth of 17.5% in January. The downward trend in commodity prices is conducive to stabilizing market demand and slowing down the growth rate of Japanese imports. However, Japan has achieved 25 consecutive months of import growth. From the perspective of the structure of imported goods, driven by oil (10.5%) and liquefied natural gas (8.9%), the import of mineral fuels increased by 19.3%, and driven by semiconductors (4.2%), the import of motors increased by 13.9%. In addition, the purchase volume of other goods (7.6%) led by clothing and accessories (4.2%) has increased; Mechanical (8.2%), driven by a generator (21.2%); Transportation equipment (30.5%). In contrast, imports of manufactured goods (-7.9%), chemicals (-2%), and raw materials (-11.4%) have decreased.

The Ukrainian crisis has had a significant impact on Japan's foreign energy cooperation, while the depreciation of the yen against the US dollar has to some extent affected Japan's import capacity, increasing the cost of Japanese imports of goods denominated in US dollars. In 2022, the Japanese yen depreciated by 19.8% against the US dollar compared to 2021. Asia remains the largest source of Japanese imports, with imports from Asian countries accounting for nearly 60% (58.4%) of Japan's total imports in 2022. Europe and North America account for 13.3% and 12.7% of Japan's imports, respectively. In February this year, Japan's imports from the United States (6.6%), Hong Kong (99.2%), Taiwan, China (17.8%), South Korea (6.5%), Singapore (27.3%), Germany (36.6%) and Australia (34.9%) increased, while imports from China (- 0.6%), India (- 15.4%) and Vietnam (- 3.8%) decreased.

The structure of Japanese imported goods has obvious characteristics, closely related to its high proportion of economic manufacturing industry. In 2022, the top five categories of goods imported by Japan were: mineral fuels ($253.3 billion, 28.2%), electronic and mechanical equipment ($120 billion, 13.4%), mechanical equipment ($71.8 billion, 8%), pharmaceutical products ($39.2 billion, 4.4%), and minerals ($31.7 billion, 3.5%). China and Japan have established a free trade partnership through the Regional Comprehensive Economic Partnership Agreement (RCEP), creating a more secure and less market barrier environment for China's exports to Japan.

Korea's stable chain has friends

South Korea is an important economic entity in East Asia, closely linked to China's supply chain, and the cross-border industrial chain between China and South Korea provides sustained support for the economic and industrial development of both sides.

Since the beginning of this year, South Korean imports have come under pressure. According to data from the South Korean Ministry of Trade, Industry, and Energy, the import volume in February increased by 3.5% year-on-year, but the import volume in March decreased by 6.4% year-on-year to 59.75 billion US dollars, still slightly better than the market's expected 6.6% decline. The sharp drop in imports from South Korea in March was the largest since August 2020, mainly driven by energy. It is worth noting that since April last year, driven by energy and food imports, South Korea has transformed from a net exporter to a net importer. In order to alleviate trade pressure and ensure the supply of raw materials and intermediate products for important industries, South Korea focuses on solving historical legacy problems, improving economic and trade relations with Japan, and lifting Japan's restrictions on exporting semiconductor related materials to South Korea.

The Organization for Economic Cooperation and Development (OECD) analysis of the South Korean economy in 2023 suggests that although the economy is expected to slow down, employment has exceeded pre pandemic levels, and the performance of the manufacturing industry is particularly outstanding. The recovery of the service industry, which requires face-to-face contact, is still slow. In the first two months of this year, South Korea imported a total of $114.28 billion, with China being its largest source of imports. The import volume of South Korea from China is 24.16 billion US dollars, accounting for 21.1%. The United States, Japan, and Australia rank 2nd to 4th respectively, but South Korea's imports from the United States only account for 53.7% of its imports from China, indicating the importance of China's position among South Korea's sources of imports.

With the adjustment of South Korea's economic structure and the full play of RCEP, Chinese goods are expected to play a more important role in South Korea's economic industry. In areas where competition between Chinese and South Korean companies is more intense, such as mobile phones, panels, automobiles, shipbuilding, home appliances, new energy, and chips, with the restructuring of global supply chains and the adjustment of intra industry division of labor, South Korea's demand for Chinese made products may also create greater space for imports.

Continued growth in the Netherlands

The unique economic and industrial structure of the Netherlands determines its distinctive characteristics in foreign trade, with an export-oriented economy occupying a dominant position and obvious advantages in high-tech products and agricultural products. It also provides more income support for its domestic economy and market. By setting a Price ceiling by the government, reducing the impact of soaring energy prices, and gradually reducing inflation, the Dutch economy is expected to achieve 0.8% growth again this year after a significant slowdown last year, and accelerate to 1.6% next year. In 2022, the Netherlands experienced a record 11.5% inflation. The inflation rate is expected to decrease to 4.9% and 5% respectively this year and next year.

According to data from the Dutch Bureau of Statistics, in January of this year, the import volume of the Netherlands increased by 18.8% year-on-year to 62.2 billion euros, due to increased procurement from the European Union (15.8%) and non EU countries (21.4%), especially imports of other commodities (49.3%), significant increases in imports of fossil fuels, lubricants and similar products (44.1%), as well as beverages and tobacco (24%). In January of this year, the Netherlands mainly imported products including fuel (accounting for 29% of total imports), machinery (26%), food and animal products (8.6%), pharmaceuticals and electronic products. During this period, the main import partners of the Netherlands were Germany (accounting for 17% of total imports), Belgium (10%), China (8.5%), the United Kingdom (6.9%), the United States (6.6%), Russia, and Italy.

It can be seen that compared to other import source countries, China and the Netherlands have a good foundation for strengthening cooperation in the supply chain by leveraging their respective industrial advantages. There is still considerable room for improvement in the market share of Chinese goods such as machinery, equipment, pharmaceuticals, and electronic products in the Netherlands.

Germany complements and demands

Germany is one of the most important manufacturing powers in the world, and has long-term stable and close economic and trade relations with China. According to the proportion of total imports and exports to GDP, Germany is one of the top developed economies and has the willingness and ability to develop foreign trade.

According to data released by the German Federal Bureau of Statistics, the bilateral trade volume between Germany and China in 2022 was 297.9 billion euros, making China Germany's most important trading partner for the seventh consecutive year. In 2022, Germany's imports from China amounted to 191.1 billion euros, accounting for 19.8% of Germany's total imports, with a year-on-year growth rate of 33.6%. China ranked 35th in Germany's import source list in 1980, 14th in 1990, and 1st since 2015. The bilateral trade between China and Germany provides effective support for leveraging their respective advantages and meeting each other's development demands.

With the accelerated economic recovery during the post pandemic period, the gradual stabilization of energy prices, and the formation of a new balance in the supply chain, Germany's investment is expected to recover in 2023. Import and export data shows that in February this year, German import prices only increased by 2.8% year-on-year, which is not only a significant decrease from 12.6% and 6.6% in December last year and January this year, but also the smallest increase since February 2021. The increase in import prices in Germany in February mainly came from consumer and capital goods, with energy imports decreasing by 8.1% compared to the previous month. China is a major producer of related goods, and Germany's imports from China can help reduce Germany's inflationary pressure. Germany's real GDP may achieve a slight growth of 0.2% in 2023, a significant improvement from the expected -0.6% in the autumn of 2022, and is expected to further accelerate to 1.3% by 2024.

The main commodities imported by Germany include mechanical equipment, transportation, chemicals, and fuel. Many of these categories are areas where Chinese goods have advantages. As an important country in the European Union, Germany's import demand not only comes from its own market, but may also integrate broader supply chain demands, develop exports to Germany, and facilitate greater space for Chinese goods to enter the EU.

Singapore expansion surgery

Singapore is the most developed economy in Southeast Asia. Although its market size is not large, it plays an important role in international trade and has also influenced the development direction of international trade through the coordination of international economic industries.

According to data from the Singapore Bureau of Statistics, Singapore's import volume in 2022 was S $655.4 billion, a significant increase of 20.1% compared to the previous year. Chinese Mainland is Singapore's largest trading partner, with bilateral trade volume reaching 175 billion Singapore dollars. From the perspective of imported commodity structure, Singapore's machinery and transportation equipment imports were the largest in 2022, at S $319 billion, accounting for 62.6% of the total import volume; The import of chemicals is SGD 52.3 billion, accounting for 10.3%; Imported industrial manufactured goods amounted to S $30.9 billion, and imported food and animal products amounted to S $14 billion. According to the import and export price index released by the Singapore Bureau of Statistics, with a value of 100 in 2018, the import price in February of this year remained basically stable at 108.8, a slight increase of 0.6 compared to the previous month. Among them, the price index of oily seeds and fruits is the highest, reaching 139.6; The value index of live animals increased to 139; The index of metal containing ores and metal waste increased to 136.9; Dairy products and eggs increased to 136.6. Relatively speaking, as one of the world's largest importers of liquefied natural gas, Singapore's natural gas index has experienced the highest decline, dropping to 84.1; The telecommunications equipment has decreased to 85.5. The differences in price changes to some extent reflect the market supply and demand relationship, and there is still room for further increase in the prices of goods in short supply.

With the support of the China Singapore Free Trade Agreement, the China Singapore Free Trade Agreement Upgrade Protocol, RCEP and other agreements, Singapore's imports from China have remained stable. Electric motors, electrical products, mechanical equipment, mineral products and base metals, chemical products, optical watches and medical equipment, transportation equipment, furniture, toys, textiles and their raw materials are the main commodities imported from China by Singapore. Trade policies will continue to affect and change the trade environment between China and Singapore. In January of this year, Singapore expanded its collection of Goods and Services Tax (GST) to cover low value goods, which will lead to adjustments in Singapore's import e-commerce and general trade structure. For Singaporean exporting enterprises, using general trade may gain more market space.

Australia has materials for tapping potential

Australia is currently the most developed economy in the southern hemisphere, with a large economic volume and broad market growth potential. The resource endowments, industries, and markets of China and Australia are highly complementary, and there is great potential for the development of bilateral trade.

In 2023, Australia's economy remains strong. international currency