Chinese exports rise surprisingly

China's exports rose by 0.5% in November compared to the same month last year - significantly more than analysts had expected. However, Beijing is likely to be concerned about the import figures. And the real estate crisis is far from over.

China's exports have risen again for the first time since May. In November, exports increased by 0.5 percent in US dollar terms compared to the same month last year, according to China's customs authority in Beijing. Analysts had in some cases expected little change or further declines. In October, exports were still down 6.4 percent year-on-year. Imports came as a surprise. These fell by 0.6 percent. Experts had expected a significant increase after imports had already risen unexpectedly in October. At the time, this increase was seen as a sign of increasing consumption on the Chinese market.

Imports to China are also important for German exporters. Chinese exports to the EU and Germany fell by more than ten percent over the course of the year. Imports from Europe and Germany also fell. Europeans have been complaining about unbalanced trade relations with the world's second largest economy for some time. EU Council President Charles Michel and Commission President Ursula von der Leyen are discussing these problems in talks with China's government in Beijing. In contrast, China's exports to Russia have been rising rapidly for months and were recently up by around 50 percent over the year.

Resorting to exports is an obvious way to boost economic growth again, as China's economic recovery is facing major challenges, the European Chamber of Commerce in Beijing said when asked: "However, over-reliance on supply-side policies poses risks because it has contributed to the significant trade imbalance that China has accumulated with the European Union and the US." Observers had hoped that trade would stabilize. Internationally, things are not going well for the Chinese because global inflation and higher interest rates are depressing demand for products from the Far East.

Chinese real estate sector in crisis

Furthermore, there are no signs of a radical improvement in China's economy, which is putting pressure on decision-makers in Beijing. The real estate sector is in a serious crisis due to its indebted developers, and consumers in China are buying less. It could therefore be difficult in 2024 if analysts are right that China will have to rely on its domestic demand because the US and EU economies are cooling down. In addition, the rating agency Moody's lowered its outlook for China's credit rating. The country did not lose its A1 rating, which characterizes it as a safe investment. However, China's Ministry of Finance was disappointed and stated that the concerns were unjustified.

According to US analysts, financial aid for indebted local governments and state-owned enterprises as well as the real estate crisis are likely to weigh on China's economy. According to some estimates, Chinese cities and provinces have the equivalent of eleven trillion US dollars in debt. Hardly any improvement in the real estate crisis The situation on the real estate market remains difficult. China Evergrande, the most heavily indebted group with the equivalent of more than 300 billion US dollars, was once again in court in Hong Kong at the beginning of the week. The property developer is threatened with liquidation. Since 2021, the southern Chinese company has repeatedly missed payments to foreign creditors, who now want to reclaim them.

The court wants to see a restructuring plan in January. In order to strengthen the market, the government relaxed regulations for home purchases and loans. In smaller cities, however, new apartments are being sold more and more slowly, as the business magazine "Caixin" reported. At the end of October, it took an average of 26.3 months to sell in third and fourth-tier cities. In July, it was still 20 months, the magazine reported. In major cities such as Beijing and Shanghai, the time rose slightly from 11 to 12.7 months. According to "Caixin", the government considers 12 to 18 months to sell an apartment to be normal.