China's foreign trade with other BRICS countries increased by 19.1 percent in the first seven months of 2023, accounting for 10.1 percent of China's total foreign trade value during that period.
Trade between the US and Mexico has surpassed China and Canada as America's top trade partner, reaching $263 billion in the first four months of 2022, indicating a shift towards regional trade and nearshoring.
China's stuttering economy poses a major threat to global commodities demand, as economic activity and credit flows deteriorate, and structural challenges and weaknesses in various sectors, including base metals, iron & steel, crude oil, coal & gas, and pork, affect the market.
China has a complex network of trade partnerships with over 200 countries, regions, and territories, and it has a trade surplus with the majority of them, including the US and India, while having deficits with major Asian economies like Taiwan, Japan, and South Korea. These trade relationships are influenced by historical, geopolitical, and strategic factors.
China's economic slowdown is worrisome for global markets as it is one of the largest buyers of commodities.
The US dollar will remain dominant in global trade, but China's yuan is gaining popularity among developing countries such as Russia, Brazil, India, and South Africa.
China's dominance in rare earths poses vulnerabilities for U.S. supply chains and highlights the need for diversified options, according to U.S. Trade Representative Katherine Tai.
China's economic slowdown is causing alarm across the world, as it is expected to have a negative impact on global economic growth, leading to reduced imports and trade, falling commodity prices, a deflationary effect on global goods prices, and a decline in tourism and luxury spending.
US imports of consumer goods, particularly home electronics, experienced a significant decline in the second quarter of 2023, following the end of the Covid-induced work-from-home electronics boom, while US manufacturing also slowed, indicating challenges in stimulating demand; however, claims that this decline in imports is solely due to re-shoring are false, as imports from US allies such as Mexico, Vietnam, and India have increased in tandem with China's declining exports to the US.
China's economy is facing multiple challenges, including tech and economic sanctions from the US, structural problems, and a decline in exports, hindering its goal of becoming a top global exporter and tech power, which could have long-lasting effects on its status in international relations and the global economy.
A potential economic downturn in China may have implications for other countries, but the impact on the United States is expected to be minor due to limited exposure to China's economy.
India is positioning itself as an alternative to China in the global supply chain, aiming to become a major manufacturing hub and increase its role in the production of goods, as the world seeks solutions to supply chain disruptions caused by health crises and geopolitical events.
China has defended its business practices and claimed that most U.S. firms want to stay and that Beijing is working to ease market access for foreign companies, in response to concerns from American businesses and global investors about the difficulties and risks of doing business in China.
US companies are becoming increasingly hesitant to invest in China due to concerns over new anti-spying laws, competition from state-funded firms, and the country's economic challenges such as deflation and a property crisis.
UBS reports higher than expected profits, job creation in the US slows, and markets rally on weaker economic data and hope for a pause in interest rate hikes. China's factory activity shrinks but at a slower pace, while retail sales increase. There are opportunities for investors in other Asian markets.
Oil prices ease as China's manufacturing activity drops and investors await U.S. personal consumption expenditure report, while U.S. government data shows tighter crude supplies and concerns arise over potential crude oil supply disruptions due to a military coup in Gabon.
Taiwanese firms in China's wealthiest county, Kunshan, are facing uncertainty as rumors circulate about the possibility of them relocating to Vietnam, leading to concerns about the future of the county and its cross-strait relations. The geopolitical landscape and pressure from downstream foreign clients have led Taiwanese manufacturers to consider moving production to other countries, despite China's role as the "world's factory." The potential exodus of Taiwanese firms could have significant implications for the county's economy and supply chains.
Chinese companies have increased their presence in cutting-edge materials and electric vehicles, making it challenging for other countries to reduce their dependence on Chinese supply chains, despite protectionist measures.
China's economic slowdown, driven by a debt-ridden and overbuilt property sector, is not expected to have a significant impact on the global economy or US exports, although a prolonged downturn could have broader consequences. While companies like elevator maker Otis will feel the effects, China's reduced growth is unlikely to be contagious beyond its borders.
China's exports and imports continued to decline in August due to weak overseas demand and sluggish consumer spending, posing challenges to the country's economic growth targets.
China's dominance in global shipping logistics and data through its commercial logistics platform Logink is raising concerns among US lawmakers and experts, who view it as a security risk and a potential threat to supply chains and military operations. The platform, overseen by China's transport ministry, partners with over 20 ports globally and collects information on shipping and cargo movement worldwide. US lawmakers have introduced a bill to prevent the US Defense Department from entering contracts with entities that use Logink and to stop its expansion through US industries and American allies.
A US factory is revealed to be under Chinese state control.
China's total import and export value in the first 8 months of this year slightly decreased by 0.1 percent compared to the previous year, but exports have continued to grow and the global market share remains stable, highlighting the overall stability of China's foreign trade operations.
The decline in Chinese imports into the U.S. is impacting steel prices and raising concerns about sourcing steel and other metals.
China's economy has consistently outperformed other major economies in the past four years, but the US is spreading false narratives and propaganda to hide this reality, according to John Ross, former director of economic and business policy for the mayor of London. The US has two motives: discouraging foreign investment in China and influencing China's political and economic policies.
China's economic problems are more likely to impact its neighboring countries and Europe than the United States, according to U.S. Deputy Treasury Secretary Wally Adeyemo, who emphasized the need for China to address its structural economic issues.
U.S. and European firms are redirecting their investment away from China to other developing markets, primarily India, due to concerns over China's business environment, economic recovery, and politics, according to a report from Rhodium Group, although China's share of global growth continues to increase.
China's struggling economy, including its deflation and property crisis, will have a significant impact on the US due to its high foreign investment exposure in China and the dependence of key exporting countries like Chile, Australia, and Peru on the Chinese market.
China has promised to increase imports from Southeast Asian countries in order to boost trade ties amidst rising tensions between China and the United States.
American firms in China have become less optimistic about the country's future, with a survey revealing that only 52% of respondents are positive about the five-year outlook, the lowest since the survey began in 1999, and 40% of US firms are shifting their supply chains and investments away from China due to geopolitical tensions and regulatory uncertainties.
The outlook of U.S. companies on China's markets in the next five years has hit a record low due to factors such as political tensions, tariffs, slow Covid recovery, and issues in the real estate market; however, complete decoupling between the two economies is unlikely.
The emergence of a new era of Asian commerce is reshaping the continent's economic and political future, with greater regional trade, increased capital flows, and a shift towards intra-Asian investment and supply chains. This trend is driven by the growth of sophisticated supply chains, foreign direct investment, cross-border banking, and the Belt and Road Initiative, as well as the need to establish new supply chains and the rise of Asian savings and demography. The integration of Asian economies will have political ramifications, with a decline in America's economic importance and a more locally focused and less Western-facing continent.
U.S. companies are losing confidence in China and some are limiting their investments due to tensions between the two countries and China's economic slowdown.
Major U.S. companies are increasingly seeking manufacturing alternatives in countries like India to diversify their supply chains and reduce dependence on China due to the pandemic and escalating tensions between Washington and Beijing.
