China has dramatically ramped up its exports and it is not slowing down. China’s leadership in this area is undeniable.
According to the General Administration of Customs of the People's Republic of China, the country's export volume unexpectedly rose to an impressive $302.3 billion in May, showing a 7.6% increase year-on-year. Analysts surveyed by Trading Economics were surprised by this rapid growth. They anticipated stricter trade with the US and potential involvement in a trade war with the EU to hinder China's exports. They predicted a 6% increase, but the actual figure was higher. Meanwhile, imports advanced by only 1.8% instead of 4.2%.
The positive trade balance reached a peak of $82.6 billion, the highest since February. Trading Economics analysts had forecasted an increase only to $73 billion.
For the first five months of 2024, China's trade surplus grew by 2.7% to $337.2 billion. Electronics exports saw the biggest rise of 4.3%. Exports to the US inched up by 0.2%, while sales to the EU dropped by 3.9% due to weak demand from European countries.
There are positive signs too. Thus, trade between China and Russia grew to $96.5 billion, manifesting a 2.9% rise year-on-year. Imports climbed by 6.9% to $54.7 billion, while exports dropped by 1.8% to $41.8 billion.
Against this backdrop, the International Monetary Fund (IMF) warned that an escalation in the trade war between Washington and Beijing could cut global GDP by 7%. The IMF supposes that over the next few years, more than three thousand new trade restrictions could emerge between the two countries. Additionally, many nations are increasingly investing in gold, seeing it as a safer asset compared to the US dollar, which is losing its status as the world's most reliable currency. In other words, gold is viewed as the most secure asset, immune to sanctions.
