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China’s foreign trade grew faster than expected in the first two months of this year, driven partly by electronics and increasing exports to emerging markets and Russia, with Beijing’s foreign minister touting “a new paradigm” in relations between the two countries.
China’s exports in January and February rose by 7.1 per cent compared with a year earlier, beating a Reuters poll of analysts that forecast an increase of 1.9 per cent. Imports jumped 3.5 per cent, compared with a 1.5 per cent estimate.
“A big driver of that export recovery has been basically the upswing of the global tech product cycle, basically electronics,” said Tao Wang, chief China economist at UBS. “We have seen that already, that cycle bottoming, in the latter part of last year.”
The improvement in China’s trade, which compares with a 5 per cent decline for the full year in 2023, is good news for policymakers as the country’s politicians gather in Beijing this week for the annual meeting of the rubber-stamp parliament.
China’s economy is struggling to rebound from a property crisis, weak consumer and investor confidence and a fall in export earnings last year but has set what analysts describe as an ambitious target of 5 per cent gross domestic product growth this year.
In the first two months of this year, the Association of Southeast Asian Nations bloc was China’s biggest trading partner, with trade rising 4.8 per cent, followed by the EU, with which trade fell 4.1 per cent. Trade with the US was up slightly, rising 0.7 per cent.
Among China’s single-country trading partners, Russia’s ranking has risen rapidly, with bilateral trade growing 9.3 per cent to a total of $37bn in the first two months of this year and China’s exports to its neighbour rising 12.5 per cent.
Russia became China’s fifth-biggest single-country trading partner last year, up from ninth in 2020. Trade reached $240bn, exceeding the two countries’ target of $200bn.
Russia roughly maintained that position in the first two months of this year, losing fifth place only by a fraction to Australia.
In comments that are likely to increase unease in the EU, which sees China as tacitly supporting Russia in its invasion of Ukraine, Beijing’s foreign minister Wang Yi on Thursday emphasised how the two countries were pursuing trade as part of a strategic relationship established by leaders Vladimir Putin and Xi Jinping.
“China and Russia have created a new paradigm of major-country relations,” Wang said. “The two sides’ political mutual trust continues to deepen, mutually beneficial co-operation and complementary advantages are being pursued, and people-to-people exchanges are flourishing,” Wang said during a press conference held to coincide with the meeting of the National People’s Congress.
“Russian natural gas is reaching households in China, while Chinese cars are driving on the streets of Russia. This fully demonstrates the strong resilience and broad prospects of mutually beneficial co-operation between the two countries.”
European leaders have repeatedly warned Beijing that its close support for Russia is eroding China’s popularity in the EU. But China insists that its partnership with its neighbour is in its own interests and not directed at any “third parties”.
“Sino-Russian relations conform to the trend of world multipolarisation and democratisation of international relations,” Wang said while criticising the “hegemony” of the US, which he said “says one thing and does another”.
Aside from trade with Russia, trade with Brazil and India soared during the first two months by 33.3 per cent and 15.8 per cent, respectively.
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