China’s export growth to moderate in 2022: EC

China‘s export growth will moderate in 2022 compared to 2021, the European Commission estimated.

In the past year, Chinese goods exporters benefited from China’s relatively early recovery in production, stable epidemiological developments, weaker competition due to disruptions in competing economies, and a shift in consumer preferences toward consumer goods and moving away from services.

Thus, according to the European Commission, China’s exports were able to notably increase their market share, but as these effects dissipate over the forecast period, growth in goods exports is expected to moderate.

Considering both goods and services, China’s exports fell 0.2% in 2020.

After growing 9.1% in 2021, these external sales would have an increase of 4%, according to the same forecasts.

China‘s export

With the main impact of the pandemic and its containment measures concentrated in the first quarter of 2020, China’s economy recovered strongly for the remainder of the year, initially driven by dynamic investment and strong exports.

Stronger consumption helped further strengthen GDP growth in the fourth quarter of 2020, to 6.5% (YoY), bringing annual GDP growth in 2020 to 2.3% and making China the only major economy to grew last year.

Annual GDP growth is expected to reach 7.9% in 2021, largely due to a strong carry-over effect and strong stifled demand.

Growth is also expected to decline to 5.4% in 2022, as the impact of the pandemic dissipates and the economy returns to its slowing trend, weighed down by weakening productivity growth, high public debt and corporate and geopolitical uncertainties.

For now, consumption is expected to be the main driver of growth in both 2021 and 2022, supported by rising personal income, relatively low inflation and improvements in the labor market.