China's exports are likely to grow even faster in December for a second consecutive month, a Reuters poll showed, a sign that global trade is starting to recover on the back of an upturn in the electronics industry and hopes of lower borrowing costs in 2024. became even stronger.
Overseas shipments from the world's second-largest economy rose 0.5% in November, ending six months of weakness, according to the median forecast of 32 economists surveyed. It is expected to increase by 1.7% in December compared to the same month last year.
Global trade slowed in 2023 as rising interest rates in the United States, Europe and other major consumer markets weighed on demand.
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The United Nations has warned that trade in goods may have shrunk by nearly $2 trillion (8%) last year. However, improving export statistics for China, South Korea and Germany suggest that the situation is gradually turning around.
South Korea's exports, which are closely watched as a global trade indicator, increased for the third consecutive month in December, and Germany's latest export statistics for November were a surprising upward revision of 3.7% month-on-month.
Analysts also expect interest rates to fall by at least 1.5 percentage points in the United States and Europe this year, improving demand for imported goods.
An employee takes notes at a port in the Shanghai Free Trade Zone on February 11, 2014. (Reuters/Allie Song/File Photo)
Shu Tiancheng, senior economist at the Economist Intelligence Unit, pointed to Taiwan's better-than-expected export statistics in December, saying, “A cyclical upturn in the global electronics sector is driving global trade to bottom out.'' There is increasing evidence that there is a growing demand for high-tech products from the United States,” he said.
“This gives us reason to be optimistic about a brighter trade picture in 2024,” he added.
China's trade statistics to be released on Friday also show imports are expected to rise 0.3% last month, after falling 0.6% in November.
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But South Korea's exports to the Asian giant, a leading indicator of Chinese imports, fell 2.9% year-on-year in December, and overseas shipments from Taiwan also fell 6.4% year-on-year. Germany's exports to China in November increased by 3.1% from the previous month.
The United Nations Conference on Trade and Development said in its December World Trade Update that its forecast for global trade in 2024 remains “highly certain and broadly pessimistic.”
On Tuesday, global trade activity, as represented by the Baltic Sea Dryness Index, fell by 7.3%, the lowest level since November 23. This reflects challenges facing shipping companies, including attacks by Iranian-allied Houthi militants on container ships in the Red Sea.
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The median forecast in the poll shows China's trade surplus will increase, with analysts expecting it to be $74.8 billion, compared with $68.4 billion in November.
