The world's most populous country is also facing labour shortages and a wave of covidiosis. According to the General Administration of Customs (GAC) - an administrative agency within China - exports from China fell by 9.9% year-on-year in December 2022, the biggest drop since February 2020. And the import figures aren't good either. They fell by 7.5%.
However, China ran a trade surplus in 2022. The trade surplus was 29.7% higher than the record in 2021, which was the highest ever for any economy. But that was largely because of the strong export growth the country had shown in Q1 2022. Last year, however, the Federal Reserve and other central banks raised interest rates to combat inflation and economic activity. Container xChange's analysis therefore predicts:
"We expect this export growth and outbound container volumes to remain low in this quarter of 2023. But while China's shipments to the US fell by 19.5% and to the EU by 17.5% in 2022, exports to Russia grew by 8.3%," it says.
China's GAC also reported that trade in goods between China and Russia will reach 1.28 trillion yuan ($190 billion) in 2022, an increase of 30% since 2021. A big factor is reportedly China's purchases of oil and coal from Russia. Until November last year, Russia was China's largest supplier of crude oil, surpassing even Saudi Arabia.
But it's not all good news for Russia. Because of the embargo, Russia is forced to supply China with oil at very low prices, literally at the cost of extraction. According to a report by the Russian Ministry of Finance, monthly revenues from gas and oil have reached their lowest level since August 2020, according to Reuters.