China: Growing Economic Challenges Will Strain Foreign Trade Even More

Foreign trade is slated for a rough year ahead, warns China, as unpredictable demand— coupled with surging inflation and labour shortages— are expected to further weigh down on the global economy.

According to Reuters, which cited China’s Commerce Minister Wang Wentao, foreign trade will experience substantial pressure throughout 2022, as uncertain demand may not align with manufacturing capacity. “This year, the pressure on foreign trade will be huge and the situation will be very severe,” he said during a press conference on Tuesday. Worsening labour shortages and rising input costs have also strained China’s small and medium-sized businesses, impacting their capacity for foreign orders, Wang continued.

In 2021, China’s economy benefited from a substantial boost in exports fuelled by the global recovery from the Covid-19 pandemic. The country reported the largest trade surplus on record, and the best GDP growth in over ten years. However, that momentum began to lose its lustre, as consumption started to slide, with retail sales only increasing 1.7% in December— substantially below estimates calling for a gain of 3.7%, and less than November’s growth of 3.9%.

As a result of uncertainties surrounding global trade, China must “do everything possible” to ignite domestic demand for goods and services this year, Wang explained, adding that the communist country will make its markets more accessible to foreign investment for its industrial sector.


Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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