beijingwalker
ELITE MEMBER
- Joined
- Nov 4, 2011
- Messages
- 65,191
- Reaction score
- -55
- Country
- Location
China's robust shifting of exports to developing world
Jun 28, 2023 12:38
In what may be termed a dramatic switch, Chinese exports have surged 55 per cent year on year in March marking a significant shift from developed to developing world markets. Former Soviet republics as well as Turkey and Iran contributed to a near-record gain in Chinese exports to the region--- believed to be an outcome of Beijing's focus on Belt and Road Initiative.
This indeed is a remarkable feat that far exceeds the 35 per cent jump of Chinese shipments to South Asian markets in the same period. The emergence of the Central Asian markets as a major destination of China's exports is not an altogether new phenomenon as exports to the region have been growing over the past years steadily. Export data say China's exports to the region have nearly tripled since 2018. Among the former Soviet Republics, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Azerbaijan, Armenia have all been raising their imports from China during the period--- with Kazakhstan topping the rest.
According to analysts, several factors contributed to the export boom, which included almost every country in the region. Clearly, Russia's war in Ukraine has made new trade routes bypassing Russia more profitable. Besides this gain, China is investing heavily in energy, mineral resources and rail transport across the Asian continent, including a new rail line between China, Kyrgyzstan and Uzbekistan (CKU), scheduled to start construction next year. The rail project, which will link China to European markets, was planned in 1997. It was approval in 2022, after Russia backed the venture. It is believed that Russia's need for Chinese support in the Ukraine war outweighed longstanding strategic rivalries between the two powers.
The aforementioned CKU railway is crucial to China for two interconnected purposes, according to experts, to advance its geopolitical interests and to secure favourable relations with Central Asian elites for their support over Chinese legitimacy in Xinjiang (East Turkestan).
As regards shipments to Iran, there was a noticeable fall in Iran's imports from China during 2019-2022 which had declined to US$800 million a month from $2.8 billion a month in 2014. But seasonally-adjusted Chinese shipments to Iran more than doubled to $1.7 billion in March this year. Chronically short of cash, Iran depends on trade credits from China, by far its largest trading partner. The March increase evidently reflected more Chinese financing that came after Iran accepted Chinese mediation in restoring diplomatic relations with its regional arch-rival Saudi Arabia.
In the kaleidoscope of Central Asian politics, a myriad of local factors explains the jump in China's influence in the region. But all of them line up like iron filings before a magnet. China's capacity to provide physical and digital infrastructure alongside affordable consumer goods and also to finance trade and investment out of its current account surplus explains its economic power and political influence in the region.
There's another geopolitical consequence of China's export prowess in Central and Southeast Asia: China's exports to the Global South and BRICS countries in March reached a seasonally-adjusted annual rate of $1.6 trillion a year. That's nearly four times China's exports to the United States and more than the combined total of China's exports to the US, Europe and Japan, which reached a seasonally-adjusted annual rate of $1.38 trillion in March.
That represents a geopolitical point of no return of sorts, the moment when China's economic dependence on the United States in particular and developed markets in general slipped behind its economic standing in the developing world. What, however, is interesting is that the recent export diversion including the boom is backed by a calculated attempt on the part of China to meet the requirement of value-added intermediate and finished goods in those markets, and given the need for such goods for domestic and export manufacturing, it is highly likely that reliance on Chinese exports would continue in the foreseeable future. This may be seen as a strategic shift not only in Chinese exports to the central Asian markets but appears to have become a cornerstone in exports to the developing world having a sound manufacturing base. It is markedly evidenced from the surge in exports to the South Asian markets, as mentioned above-to the tune of 35 per cent year on year in March this year.
China has without doubt become a major global player in trade as a supplier and as a market. China's share of global goods trade increased from 1.9 per cent in 2000 to 11.4 per cent in 2019. In an analysis of 186 countries, China is the largest export destination for 33 countries and the largest source of imports for 65. However, trade exposure to China varies substantially by region and sector. China has a high impact on specific regions, notably those with globally integrated technology chains.
Export to the global south is further augmented by Chinese capacity for providing lending facility to governments undertaking mega development projects. A sizeable portion of the capital machinery and equipment is sourced in these projects from China, especially those related to building communication infrastructure.
China's robust shifting of exports to developing world
In what may be termed a dramatic switch, Chinese exports have surged 55 per cent year on year in March marking a significant shift from developed to developing world markets. Former Soviet republics as well as Turkey and Iran contributed to a near-record gain in Chinese exports to the region--- bel
