Abstract: In the fourth quarter of 2022, China's export growth rate rapidly turned negative, but rebounded in the first quarter of 2023. Since the second quarter, it has once again turned negative, which is generally seen as a reflection of the contraction in external demand due to the slowdown in overseas economic growth. Export is also widely considered as one of the key factors constraining China's economic recovery.
From August onwards, China's year-on-year export amount growth rate remains negative, but the rate of decline has narrowed, going from -15.4% in July to -7.3% in September. The prevailing view is that this seems to indicate a stabilization in external demand. However, some important characteristics of China's export performance since the beginning of the year are challenging to be fully explained solely by changes in external demand.
This article presents two fundamental facts about China's exports this year, then attempts to explain the current export characteristics from the perspectives of cost and domestic demand, and accordingly discusses their implications for the macroeconomy and policies.
