China’s exports rebounded strongly in March, rising by almost 15 percent over the previous year. The rebound can be attributed to factories operating at full capacity to fill accumulated orders, as well as strong demand for new/alternative energy vehicles, lithium batteries, and solar cells. However, there are still challenges in the shipping industry, including a buildup of empty containers in Chinese ports and a drop in global e-commerce.
Despite these challenges, China’s exports are expected to remain resilient in the coming months. Intra-Asia trade has shown resilience, and China’s trade with the Association of Southeast Asian Nations (ASEAN) has seen substantial growth. The emergence of the China-Southeast Asia trade partnership highlights the economic potential and mutual benefits for both China and ASEAN countries.
Factors contributing to China’s export rebound
The rebound in China’s exports can be attributed to a number of factors, including:
- Factories operating at full capacity to fill accumulated orders. Following China’s coronavirus outbreak, inventories were depleted, but the Shanghai Containerized Freight Index rose for three straight weeks in April, which last happened in June 2022.
- Strong demand for new/alternative energy vehicles, lithium batteries, and solar cells. These products are often shipped via specialized vessels known as roll-on/roll-off (roro) carriers rather than standard containers.
- Bulk cargo such as steel and refined oil is typically transported using dry bulk carriers and tankers, eliminating the need for containerized shipment.
Challenges facing the shipping industry
Despite the positive indicators for China’s exports, there are still challenges facing the shipping industry. These challenges include:
- A buildup of empty containers in Chinese ports. This is due to the type of goods being exported and their delivery method.
- A drop in global e-commerce. Although China’s exports have rebounded, the growth in global e-commerce has slowed in recent years.
- Geopolitical friction between China and the US. This could impact the stability of China’s exports in the future.
Outlook for China’s exports
Despite the challenges facing the shipping industry, China’s exports are expected to remain resilient in the coming months. Intra-Asia trade has shown resilience, and China’s trade with the Association of Southeast Asian Nations (ASEAN) has seen substantial growth. The emergence of the China-Southeast Asia trade partnership highlights the economic potential and mutual benefits for both China and ASEAN countries.
