Chinese imports surge

China has been pushed into a trade deficit after its imports outweighed exports over the year to March, suggesting the country is moving towards becoming a consumer economy, rather than the export-led one for which it is famed.

Official figures have been released showing a surprise trade deficit in China as imports continue to grow. The results confirm widespread optimism that future growth in China will not be dependent on exports, pushing the nation towards being consumer-reliant and more domestically sustained.

Imports grew by 14.1% over the year, which smashed expert estimates of 5.2%. Exports increased by 10%, pushing the country into a trade deficit. Analysts believe this shows consumers and firms are ready to take responsibility for driving the country’s rapid growth.

JP Morgan’s chief China economist Haibin Zhu told City AM: “The stronger than expected import growth last month suggests this cycle is probably coming to a turning point. If domestic demand turns out to be stronger than expected, it’s definitely positive for the economic outlook.”

Another indicator underlining the rise of the consumer in China was revealed in recent tourism statistics, which show the Chinese now outspend America and Germany as the world’s top source of tourism revenue. A record $102 billion was shelled out by Chinese tourists in 2012, reflecting a general increase in the amount of money coming from developing nations.

The Chinese economy is expected to grow at 8.2% this year, propelled by domestic consumer demands. The Asian Development Bank reported that the new leaders’ focus on delivering sustainable, quality growth is a refreshing approach from the growth-at-all-costs approach of the past.

TMF Group has eight offices in China, with plans to increase to more than 20 in coming years. Talk to our local experts on China about your business.

 
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