This archive report was first published on 11 July 2021.
July 10, 2021 - China's economy is expected to remain a major contributor to global trade growth in 2022, driven by continued strength in domestic demand and import demand fueled by robust export orders, an expert has said.
Mehran Nakhjavani, partner of emerging markets at MRB Partners, noted that Chinese retail sales have peaked and are rolling over, but still expanding at a faster rate than before the pandemic. The return to 'normal' consumption levels is underpinned by the elimination of food price inflation, which has acted as a material headwind to discretionary spending.
According to statistics from the National Bureau of Statistics of China, China's overall retail sales in May were 9.3 percent higher than two years ago, with online sales up 32 percent and auto sales growing 15 percent from the same period in 2019.
The real performance of Chinese foreign trade is consistent with a return to the norm prior to the twin disruptions of the U.S.-led tariff war and the coronavirus pandemic, said Nakhjavani. Trade data continue to be obscured by base effects and the depreciation of the U.S. dollar over the past year.
However, the PMI for manufacturing export orders remains in expansionary territory and close to a six-month high, which is an encouraging sign for global trade, Nakhjavani said. The volume index measuring containerized shipping exports has also pulled back from its peak and is expanding at a steady pace consistent with pre-pandemic normality.
