China’s exports to the United States have declined for seven consecutive months. Analyses show that this trend may continue as U.S.–China relations further deteriorate.
Data released by China’s General Administration of Customs on March 7 showed the total trade value between the United States and China in the first two months of this year was 702.98 billion yuan (about $102 billion), dropping 10.6 percent year-over-year.
Among them, Chinese exports to the United States were 494.11 billion yuan (about $71.7 billion), a decrease of 15.2 percent, while imports from the United States were 208.87 billion yuan (about $30.3 billion), an increase of 2.8 percent.
The substantial decrease in exports reduced China’s trade surplus with the United States to 285.24 billion yuan ($41.4 billion), down 24.9 percent over last year.
China’s exports to the United States have experienced a seven straight months decline, with a continuing trend. According to the Bank of China Research Institute, the value of the country’s exports to the United States dropped 3.8 percent year-over-year last August.
Meanwhile, the decline in exports to the United States continued to expand in the following three months, respectively 11.6 percent in September, 12.6 percent in October, and 25.4 percent in November. The decline slowed slightly to 19.5 percent in December.
The drop in Chinese exports is especially evident in container freight rates.
According to the World Container Index released by Drewry, a UK-based maritime research consultancy, container freight rates have declined for over a year, with steep drops after last August.
The index on March 9 showed that the freight rates for a 40-foot container from Shanghai to Los Angeles and New York were $1,916 and $2,707, respectively, a decrease of 83 percent and 79 percent compared to the same period last year.
According to a Wall Street Journal report on March 2, traffic from Chinese ports has slowed significantly, as “empty containers are stacked six high and trucks with no cargo dot the highway leading to the major terminals. [And] The world’s largest box-ship operator plans to return dozens of chartered vessels to their owners.”
Data released by the U.S. Department of Commerce last month showed that Mexico, Canada, and Japan were the top three countries with record exports to the United States in 2022, in which China had dropped to fourth place from first-ranked in 2020.
A report (pdf) published by the Bank of China Research Institute on Feb. 28 indicates that the United States is China’s largest export destination, and the weakening of exports to the United States has seriously inhibited China’s overall export growth.
The report’s analysis said the trend would likely intensify in the future due to various factors, including U.S.–China trade conflicts, the decoupling of industrial supply chains from China, and companies shifting their manufacturing out of the country, which would all lead to a reduction in China’s exports to the United States.
In addition, Beijing has been selling U.S. debt for five consecutive months. Data released by the U.S. Department of Treasury in mid-February and cited by Nikkei Asia showed Chinese holdings of Treasury securities fell to $867 billion at the end of last December, the lowest point in 12 years. Last year, it sold 173.2 billion worth of U.S. Treasury bonds, up 17 percent over the previous year.
Regarding Beijing’s move to offload U.S. debt, Shi Jin (a pseudonym), a former financial analyst at China’s Bank of Communications, said that the move may be a precaution against possible U.S. sanctions and diversify financial risks.
He told The Epoch Times on March 13 that the debt securities have a high rate of return and are guaranteed by the U.S. federal government, making them a stable investment. However, as U.S.–China relations continue to deteriorate, Beijing worries that Washington may apply restrictions on its U.S. debt holdings in the face of sanctions.
U.S.–China relations have reached an unprecedented low point after the recent Chinese spy balloon incident. A Gallup poll released on March 7 showed that only 15 percent of Americans view China favorably.
Regarding economic and military strength, 66 percent of American adults believe that the Chinese military poses a critical threat to the vital interests of the United States, while 27 percent think it’s an important but not a critical threat, and only 6 percent said it’s not an important threat.