China’s export growth slowed to the weakest in six months in August as a 33% drop in exports to the US brought overall growth in sales abroad down to 4.4% year-on-year, far weaker than a gain of 7.2% in July. The sales to other markets did however keep Beijing on track for a record trade surplus of over $1.2 trillion this year.
There is a fundamental shift taking place in terms of China’s export arrangements, with the US in particular losing ground as China’s key export destination, and other markets, in particular in Southeast Asia gaining in terms of importance.
So to what degree can Southeast Asia and the rest of the Global South replace the US in terms of export value? The numbers above are not much use in taking a view on that, because they almost certainly include the resurgence of Belt and Road Initiative (BRI) spending, particularly on larger infrastructure projects, so the recent boost might be related to that and therefore not yet a long-term solution.
But at the same time, the BRI policy of helping to develop infrastructure, and in turn create new markets for Chinese exports, has once again proven to be something of a salve for China’s export issues. And the longer this goes on, in conjunction with ongoing US tariffs and the associated uncertainty they bring, it feels more like it could be a legitimate way forward for China to cast off its trade dependence on the US and Europe.