January and February trade figures signal China’s slow economic recovery this quarter. According to local news, export volumes fell by 6.8% year-on-year in the first two months of 2023 to USD 506.3 billion.

South China Morning Post (SCMP) reported that China is still facing challenges in the trade sector even after the lifting of its zero-COVID policy. However, experts claim that the recent figures are “in line with market expectation.”

Speaking to SCMP, Zhang Zhiwei, chief economist at Pinpoint Asset Management, expects the exports sector to remain under pressure for the rest of the year. “China’s economy will have to depend more on domestic demand this year,” he added.

He also highlighted that China is aware of the challenges it could face in case some companies decide to relocate their businesses outside China. “The top priority for the government is to boost confidence among private and foreign investors in China,” Zhiwei told SCMP.

Imports have also witnessed a decrease to USD 389.42 billion, marking a 10.2% drop compared to January and February figures of 2022.

The drop in imports is “more of a shock to the market than that of exports,” says Iris Pang, chief Greater China economist at ING Bank. Easing the COVID-19 measures in the country was expected to improve the flow of inbound goods.

However, the country is generally expecting a slow trade recovery. A report issued by the National Development and Reform Commission (NDRC) noted that “a slowdown in the growth of global economy and trade this year, and competition in international trade and for foreign investment will intensify,” says SCMP.