BOFIT Weekly Review 2015/20
Gradual evolution in structure of China’s foreign trade
China’s foreign trade slipped in April, with exports down 6 % y-o-y and imports off 16 %. China’s April trade surplus amounted to $34 billion. The sub-index of new export orders in the purchasing managers’ CPI also indicated a weak outlook for foreign trade.
There were large differences across export product groups. Exports of high-tech products fell only 2 %, while exports of mobile phones increased by nearly 24 %. Exports of labour-intensive goods plunged. For example, clothing exports were down 21 %. Underlying this trend are China’s rising labour costs that have boosted prices of export products, and yuan appreciation. This trend, in turn, reflects the structural adjustment of the Chinese economy as it transitions from low add-value assembly industries to high value-added production.
While the on-going slide in commodity prices is partly responsible for the drop in imports, the volume of imports was also down about 8 % y-o-y in the first quarter of 2015.
China’s foreign trade, 12-month moving total
Source: Bloomberg