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2024 opens with bad news on Beijing’s trade balance front. Exports fall for the first time in eight years in 2023 and the Chinese Central Bank, faced with the collapse of this cornerstone of the economy, injects liquidity for 65 billion yuan (equal to approximately 9.15 billion dollars) in repurchase agreements seven-day assets at an interest rate of 1.8%.
A historic decline
An injection of parachute liquidity to support the credit network and the confidence of the financial markets. For China with -4.6% in 2023 it is the first export to decline since 2016. Global demand and geopolitical tensions which have weighed on global trade do the rest.
Beijing, amid domestic pressures with growing fears of deflation, has seen one of its main growth pillars falter. Last year, it exported $3.38 trillion worth of goods, a decline of 4.6% from the previous year, when shipments soared during the Covid-19 pandemic, fueled by online shopping.
In the meantime, global demand has undergone a sharp correction in Europe, the USA and other countries, accelerated by the sudden increase in interest rates to combat the surge in inflation.
The Russian partnership
In December, however, China’s exports rose 2.3% year-on-year to $303.6 billion. The improvement is a sign that demand may be recovering after months of decline earlier in the year.