India-China trade shows first signs of slowdown in years

For the first time in recent years, bilateral trade between India and China declined by about 0.9%

For the first time in recent years, bilateral trade between India and China declined by about 0.9%
For the first time in recent years, bilateral trade between India and China declined by about 0.9%

India-China trade falls by 0.9%

The India-China trade, which in recent years rose sharply despite bilateral tensions over the border dispute, showed the first signs of a slowdown in years falling by 0.9 percent in the first half of this year.

This came as China’s overall foreign trade declined by about five percent as its economy struggled to recover from Covid blues. China’s exports to India in the first half of this year totalled USD 56.53 billion compared to USD 57.51 billion last year registering a decline of 0.9 percent, according to the data released by Chinese customs on Thursday.

India’s exports to China during the same period totalled USD 9.49 billion compared to USD 9.57 billion last year. The trade deficit in the first half of 2023 too declined significantly to USD 47.04 compared to USD 67.08 billion last year. Last year was a bumper year for India-China trade as it touched an all-time high of USD 135.98 billion despite the continued chill in the bilateral ties over the military standoff in eastern Ladakh in May 2020. The total India-China trade in 2022 overtook the USD 125 billion mark a year earlier by registering an 8.4 percent increase.

New Delhi’s trade deficit with Beijing crossed for the first time a USD 100 billion mark despite frosty bilateral relations. The trade deficit for India stood at USD 101.02 billion in 2022 crossing the 2021 figure of USD 69.38 billion. The slowdown of India-China trade in the first half of this year came as China’s total trade including imports and exports fell nearly 5 percent from a year earlier in dollar terms. While exports slipped 3.2 percent and imports declined 6.7 percent.

Also, China’s exports tumbled 12.4 percent in June from a year earlier amid weakening demand following increasing interest rates by central banks to curb inflation as the Chinese economy struggled to stage post-COVID recovery. Chinese customs data released Thursday showed imports slid 6.8 percent to USD 214.7 billion. The disappointing data is yet another indicator of China’s sputtering post-pandemic economic recovery, which has lost momentum in the second quarter, analysts told the Hong Kong-based South China Morning Post.

“The latest data in the developed countries shows consistent signals of further weakness, which is likely to put more pressure on China’s exports in the rest of the year,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.

“China has to depend on domestic demand. The big question in the next few months is whether domestic demand can rebound without much stimulus from the government,” Zhang told the Post.

Shipments to the Association of Southeast Asian Nations, which is China’s largest trade partner and one that provided major support to its export sector earlier this year, fell by 16.86 percent compared to a year earlier. Exports to the European Union, declined by 12.92 percent year on year and the United States tumbled 23.7 percent from a year earlier to USD 42.7 billion.

China’s trade surplus with the US narrowed by 30.6 percent to USD 28.7 billion, according to the customs data. However, exports to Russia in June increased by 90.93 percent compared to the same month last year. China’s imports also fell by 6.8 percent in June from a year earlier to USD 214.7 billion, down from a fall of 4.5 percent in May.

Releasing the data, General Administration of Customs spokesman Lu Daliang said China would be facing more pressure to boost the stable growth of foreign trade in the latter half of the year. “Inflation is still prominent in developed world economies, geopolitical conflicts are still taking place and there is not enough drive for immediate growth in global demand,” The Post quoted him as saying. Lu added that China’s economy is resilient and revitalizing and that the foreign trade sector would still head toward a positive direction in the longer term.

[with PTI inputs]

PGurus is now on Telegram. Click here to join our channel and stay updated with all the latest news and views

For all the latest updates, download PGurus App.

We are a team of focused individuals with expertise in at least one of the following fields viz. Journalism, Technology, Economics, Politics, Sports & Business. We are factual, accurate and unbiased.
Team PGurus

LEAVE A REPLY

Please enter your comment!
Please enter your name here