China’s exports, according to the results of November, showed growth for the first time since April this year.

Against the background of the positive dynamic of supplies from the mentioned country, imports are declining at a slow pace. According to the data of the General Administration of Customs, released on Thursday, December 7, China’s exports in November in dollar terms showed an increase of 0.5% compared to the result for the same period last year. It is worth noting that in October, this figure fell by 6.4% year-on-year. Since April, the dynamic supply from China had been consistently negative, demonstrated a gradual decline, and acquired signs of a kind of systemic phenomenon. The reason for the decrease in this indicator of the world’s second-largest economy was a drop in global demand for products from manufacturers from the mentioned country.

The November increase in Chinese exports was partly due to the seasonality factor. On the eve of the vacation period at the end of the year, the level of consumer demand is traditionally growing. Also, the positive November indicator is partly due to the specifics of the comparison base. Last year, China had restrictions related to the coronavirus pandemic, which affected many processes in the system of functioning of the state, including foreign trade. In 2023, against the background of the lack of measures to combat the spread of the specified disease, the situation in the sphere of Chinese exports improved.

Ken Cheung, chief Asian currency strategist at Mizuho Bank, said that the improvement in the indicator of foreign supplies was a positive signal for the recovery of the Chinese economy. At the same time, there is no definitive understanding of the prospects for the continued existence of this impulse. In this case, the uncertainty increases against the background of a decrease in Chinese imports in November. The dynamic of this indicator is evidence of weak domestic demand.

In November, China’s imports in dollar terms decreased by 0.6% year-on-year. In October, this indicator showed an increase of 3% compared to the same period in 2022. At the same time, analysts had forecast a 3.3% increase in Chinese imports in November.

Currently, many analysts tend to believe that the level of activity in sphere consumption in the mentioned country will not show growth in the foreseeable future. In October, consumer prices in China were in the deflation zone. This happened for the second time since the beginning of this year. According to experts, the observed state of affairs is a sign that consumers are taking an extremely cautious approach to their spending amid a slowdown in the Chinese economy.

Analysts also say that the growth of China’s exports is not sustainable. Capital Economics experts doubt that the positive dynamics in the sphere of external supplies will be long-term. In their opinion, the November growth is partly the result of exporters reducing the cost of their products to gain market share. Experts point out that this strategy is unsustainable. At the same time, they are saying that without support in the form of a revised pricing policy, exports probably will not be able to withstand the slowdown in growth among China’s main trading partners, which, in their opinion, will continue in the first half of 2024.

In the first eleven months of this year, the supply of products from the mentioned country decreased by 5.2% compared to the same period in 2022. Exports to the United States and the EU fell by 8.5% and 5.8% respectively. According to analysts, this indicator will not improve shortly.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, says that the EU and US economies are currently cooling. The expert stated that China should consider domestic demand as the main growth factor next year.

Currently, Beijing is trying to confront several economic challenges, including high debt levels and a weak real estate market. In this context, the fall in consumer prices is also something that China has to cope with.

The World Bank has lowered the mentioned country’s economic growth forecast to 4.4% for next year. Representatives of the International Monetary Fund expect this figure to be at the level of 4.6% in 2024. This week, Moody’s downgraded its outlook on the Chinese government’s credit ratings. The organization also expects the country’s GDP growth to slow to 4% in 2024 and 2025.