Watts Dean personifies the American holiday consumer who purchases goods made everywhere. And pervasive indifference in the U.S. during a particularly active shopping season is helping China's exports to the U.S. remain resilient despite years of political and trade tensions.
As China tries to stimulate the economy, geopolitics and interest rate cuts in the US are weighing on the outlook
Now, Chinese exporters so often use third countries like Mexico and Vietnam to ship goods to the U.S. that it can be difficult for consumers to know where an item actually comes from.
“In fact, the problem with estimating whether American consumers are buying a lot more in places like Southeast Asia and Mexico is that it's hard to tell how much of it is actually Chinese goods,” said Christopher Beddor, deputy director of China research at Gavekal Dragonomics. “No matter how you break down the data, China is still a major exporter to the US.”
And it is predicted that China's status will consolidate in 2024.
Goldman Sachs expects China's global exports to grow 3.1 percent next year, after a 3.4 percent decline this year. S&P Global Ratings forecast growth of 4.2 percent next year, up from 2 percent this year, due to a “turn in the technology and electronics cycle.”
They blame brands, not suppliersDouglas BarryChina's exports to the U.S. fell 13.8 percent in value terms in the first 11 months of this year compared to the same period in 2022, although shipments fell in November for the first time since July last year increased. by 7.35 percentthanks to a low comparison basis.
Christmas shopping orders to China would have reached the U.S. by mid-2023, said Douglas Barry, a Washington-based consultant who monitors U.S.-China trade.
Barry also teaches Issues and Image Management in the Communications Department at George Washington University. He recently surveyed his 22 students this holiday season and found that country of origin had little influence on their Christmas shopping decisions.
“Some have stopped buying fast fashion, not because of the country of origin, but because of environmental damage and poor labor practices,” he said. “They blame the brands, not the suppliers.”
There are doubts that trade can be China's economic pillar in 2024, even as exports grow
However, Minesh Pore, CEO of Chinese brand-to-factory sourcing platform BuyHive, said major retailers are finding it difficult to “sell” China to the US public. Travel restrictions, he added, have made it harder for brands and suppliers to meet and socialize.
According to Pore, Chinese sellers transport their goods through third countries in Latin America and other parts of Asia. And analysts expect these third country routes to ensure the resilience of Chinese exports to the US in the coming years.
Some Chinese factories have Opening a store in Mexico to secure orders from abroad, and their shipments from Mexico avoid US import tariffs against China. Official US data shows that the Latin American country bordering the US exported $356 billion worth of goods to the American market in the first ten months of 2023.
Vietnam is another important route to the US and a rival to China in the manufacturing sector. The country's factories mainly export clothing, shoes and consumer electronics.
[I]It is important to note that China maintains its leading position as the main source of American imports. Nathan Chow, DBS Bank
According to the Southeast Asian country's Ministry of Planning and Investment, China recorded 94.9 percent more direct investment in Vietnam in the first nine months of this year than in the same period in 2022.
“It’s remarkable how strong [China] despite all efforts to bring it down,” said Jayant Menon, senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.
The share of American imports from China has technically fallen from about 22 percent of the total just before the trade dispute to about 14 percent today, Beddor said. But “in practice,” he said, the decline was less severe.
“Despite the progress made by Mexico, Canada and Vietnam in supplying consumer goods to the US, it is important to note that China maintains its leading position as the main source of American imports in this sector,” said Nathan Chow, senior economist at DBS Bank.
AliExpress, an online retail service owned by Chinese e-commerce giant Alibaba, reported “positive sales growth” on the recent Black Friday – one of the busiest shopping days in the US each year, which comes just after the Thanksgiving holiday when many Americans have the day off work. The top-selling categories included toys, computer and office supplies, home appliances and furniture, a spokesman for the retailer said. Alibaba owns the South China Morning Post.
Black Friday spending rose nearly 8 percent year-on-year to about $10 billion, according to U.S. firm Clarkson Consulting, which attributed the rise to shoppers' relief at falling prices for everyday expenses like gasoline.
And on Nov. 27 — a day of e-commerce discounts known as Cyber Monday, three days after Black Friday — total spending reached $12.4 billion, up 9.6 percent from last year, according to Adobe Analytics Previous year.
Analysts say the stability of the U.S. economy has put Chinese exports on solid footing this year. The U.S. economy is expected to grow 2.4 percent year-over-year in 2023, up from 2.1 percent in 2022, according to think tank The Conference Board.
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