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Could China rely on BRI countries for future export?

2023-06-21 07:48:47 CCFGroup

China's total exports of textiles and apparel was $92.883 billion in January-April 2023, down 2.0% year-on-year, and export value of textiles and apparel in April was $25.658 billion, up 8.8% year-on-year, down 2.8% month-on-month. April's export data was not ideal when compared to the large increase in export value in March, which was contributed by earlier orders. But a year-on-year growth of 8.8%, to some extent, also proved a sustainable growth of export.

By country, the following 20 countries sorted in descending order (more details in https://www.tteb.com/newscenter/detail-RD0000-2023051900188.shtm), showed that compared to last year, China's exports to Europe and the United States continued to fall, with EU falling by 19.39% and the US by 14.13%. On the contrary, the export value of BRI (Belt and Road Initiative) countries increased significantly, Kazakhstan increased by 167.67%, Singapore increased by 106.12%, Russia increased by 42.89%, and Vietnam increased by 7.05%.

2023 January-April China textile and apparel exports by major markets ($ billion)
NO	Region	Export value	YoY growth	Share
	TTL	92.88	-2.00%	100%
	EU	10.79	-19.39%	11.61%
1	US	13.46	-14.13%	14.49%
2	Vietnam	6.01	7.05%	6.47%
3	Japan	5.69	-3.96%	6.13%
4	South Korea	3.25	18.07%	3.50%
5	Australia	2.65	8.75%	2.85%
6	Malaysia	2.44	16.46%	2.63%
7	India	1.98	6.71%	2.13%
8	Russia	1.95	42.89%	2.10%
9	Germany	1.89	-24.00%	2.03%
10	UK	1.79	-12.72%	1.93%
11	Philippines	1.77	-9.42%	1.90%
12	Indonesia	1.70	-20.62%	1.83%
13	Kazakhstan	1.69	167.67%	1.82%
14	Thailand	1.52	-12.83%	1.63%
15	Saudi Arab	1.49	43.94%	1.61%
16	UAE	1.49	-8.47%	1.61%
17	Singapore	1.45	106.12%	1.56%
18	Brazil	1.44	25.72%	1.55%
19	Italy	1.41	-14.41%	1.52%
20	Netherlands	1.29	-20.90%	1.39%

Through comparison between countries whose export value increased and those decreased, we can find that the growth of exports, Central Asia and the Belt and Road countries rose while Europe and the United States fell, was more or less a reflection to China's foreign policy. The BRI countries to fill the gap of declining exports to Europe and US is a positive phenomenon for China's textile and apparel exports.

January-April China's textile and apparel export value by region ($ billion)
	2022	2023	YoY growth	Absolute value
Kazakhstan	0.63	1.69	167.67%	10.56
Singapore	0.70	1.45	106.12%	7.45
Russia	1.36	1.95	42.89%	5.84
South Korea	2.75	3.25	18.07%	4.97
Saudi Arab	1.04	1.49	43.94%	4.56
Vietnam	5.61	6.01	7.05%	3.96
Netherlands	1.63	1.29	-20.90%	-3.41
China Hongkong	1.46	1.03	-29.45%	-4.29
Indonesia	2.15	1.70	-20.62%	-4.42
Germany	2.48	1.89	-24.00%	-5.95
US	15.68	13.46	-14.13%	-22.15

This year's export value was only worse than 2022. Although in the first half of this year the market reported unsatisfactory export, the data below showed that the reality was actually not such bad. The BRI countries have, to some extent, replaced the dominating status of Europe and the United States in China's export, and compared to the mature market in Europe and the United States, it is clear that these emerging countries will probably bring new opportunities to China's future exports.

In conclusion, as the first half of this year is coming to an end, a massive export shrinkage did not appear, although export to European and US did shrink significantly. The rise of emerging economies now plays an important role to China's exports, and more importantly, unlike mature market in Europe and the United States, the BRI countries are full of opportunities to China's export.

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