China's exports were up 7.1 per cent year-on-year, surpassing expectations, while imports also grew by 3.5 per cent, Reuters reported on Thursday, citing recent customs data. This growth indicates a positive trend in global trade and provides a boost to policymakers aiming to support economic recovery. China's strong export performance in the first two months of the year, along with South Korea, Germany, and Taiwan, was driven by increased demand for semiconductors. Premier Li Keqiang announced a 2024 economic growth target of around five per cent and emphasised the need to transform China's development model away from heavy reliance on exports and industrial overcapacity. While export growth has been a positive sign, challenges remain, such as ongoing manufacturing contraction and declining new export orders. Some economists caution that recent export gains may be due to price reductions by Chinese manufacturers to secure orders. Overall, sustained export growth will be crucial for China's economic recovery, as policymakers navigate challenges like a property crisis and debt burdens at the local government level.
