China: Trade with Russia now larger than with Germany

Russia’s war against Ukraine and the sanctions that followed are causing significant shifts in world trade – also and especially for Germany. This is shown by new figures published on Thursday. For one thing, China has dramatically expanded its trade with Russia. For the first time, Russia has even become a more important trading partner for China than Germany. Germany’s trade with China is declining. On the other hand, Germany’s trade with Russia has practically come to a standstill.

China reported unexpectedly strong export numbers on Thursday. The value of exports in US dollars in March was 14.8 percent higher than a year earlier. The rise to $315 billion surprised experts who had expected exports to fall again after a slump in January and February of this year. But especially China’s business with Russia is booming and is now larger than trade with Germany.

China’s trade volume with Russia climbed 72 percent to around $20 billion in March. Trade with Germany fell to $18.6 billion.

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Trade with Russia gives China a boost

China’s exports to sanctioned neighboring Russia even rose by 136 percent. So they have more than doubled. China’s imports from Russia – including cheap energy – increased by 40 percent. China’s communist regime has backed Russia’s President Vladimir Putin since the Russian invasion of Ukraine began more than a year ago.

China is the world‘s second largest economy and largest trading nation after the United States. The recovery in exports should give China new impetus. Imports fell by 1.4 percent to $227 billion. However, the minus was smaller in January and February with ten percent each. Experts had expected significantly weaker imports.

Foreign trade growth of 7.4 percent in March marks a turnaround for China. Exports had previously declined for five straight months. The trade surplus rose to $88 billion.

The US is also benefiting from the recovery in China. China imported 5.6 percent more from the United States in March. Exports to the US fell by 7.7 percent.

Germany falls behind in trade with China

Germany’s exports to China, on the other hand, fell again by 2.1 percent. China’s exports to Germany fell by 1.4 percent. The German-Chinese trade reached a total value of only 18.4 billion dollars.

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“The Chinese economy is picking up speed again,” said Jens Hildebrandt, board member of the German Chamber of Commerce (AHK) in China. However, the significant increase in exports is “partly due to catch-up effects from the Covid wave in January”.

China’s foreign trade weakened noticeably last year due to the tough corona measures and lower demand for goods “Made in China”. After the end of the zero Covid strategy in December, a violent corona wave initially paralyzed the Chinese economy.

The new head of government, Li Qiang, made it clear how important exports are for China by calling for “trying every method” to stabilize foreign trade. While Chinese growth was only three percent in 2022, the government has set a target of around five percent for this year. The International Monetary Fund (IMF) anticipates 5.2 percent growth in China.

Germany’s trade with Russia falls to almost zero

While Russia and China expand their businesses, trade between Russia and Germany has largely come to a standstill. In February 2023, German imports from Russia were 91 percent lower than in February 2022, when Russia invaded Ukraine. As the Federal Statistical Officet announced that the value of goods imported from Russia was only 0.3 billion euros. As a result, Russia dropped from eleventh place to the insignificant 46th place among Germany’s most important suppliers of goods.

The decline in imports is mainly related to Russia’s previous role as an energy supplier: In February 2022, imports of Russian oil and natural gas were still 2.2 billion euros. A year later, only 4.2 million euros remained, a decrease of 99.8 percent. The import of coke oven and mineral oil products fell by 91 percent to 30 million euros. Coal imports fell by 92.5 percent to 26 million euros. For comparison: In February 2023 Germany imported oil and natural gas with a total value of 6.0 billion euros, coke oven and oil products with a value of 2.2 billion euros and coal with a value of 0.7 billion euros.

Goods worth 0.8 billion euros were exported from Germany to Russia in February. That was 60.5 percent less than a year ago. For the first time since December 2020, Germany achieved a surplus of 0.5 billion euros in trade with Russia.

With material from the DPA

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