New Delhi: Trade between India and China declined in the first half of this year, a first after two years of growth, including record-high total trade last year.
This development comes as China’s overall worldwide trade as of June suffers the largest year-on-year decrease it has seen since the COVID-19 pandemic began over three years ago.
According to data provided by China’s customs department on Thursday, June 13, its exports to India reduced by 0.9% in the first half of 2023 to $56.53 billion, and its imports from India reduced by 0.6% for the same period to $9.49 billion, The Hindu reported.
The Press Trust of India reported that the total trade between the two Asian giants stood at a record $135.98 billion last year, marking an increase of 8.4% from figures registered in 2021.
Last year also saw India import $101.02 billion more from China than it exported to it – a figure known as the trade deficit. In 2021, India’s trade deficit with China was $69.38 billion.
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China’s trade with other countries has also decreased. Reuters reported that its exports to the United States, which is the top destination for Chinese goods, decreased by 12% between January and June 2023 compared to the same period last year – the highest decrease out of all its major trading partners.
“The global downturn in goods demand will continue to weigh on exports … But the good news is that the worst of the decline in foreign demand is probably already behind us,” Zichun Huang, China economist at Capital Economics, told Reuters.
A spokesperson for China’s customs department, officially known as the General Administration of Customs (GAC), said that the country’s export situation was caused by “a weak global economic recovery, slowing global trade and investment, and rising unilateralism, protectionism and geopolitics”, according to Reuters.
But China has not seen a decrease in exports to all major economies. The Financial Times reported that its year-on-year exports to Russia increased by $4.5 billion, and Reuters’ report said that Chinese exports to its northern neighbour increased by 92% between January and June 2023 compared to the same period last year.
FT also reported that while China’s exports of products like mobile phones, steel and clothing have decreased, its export of cars and car parts saw an increase, according to GAC data.
The products that China majorly exports to India include active pharmaceutical ingredients, chemicals, machinery auto components, and medical supplies, The Hindu’s report said.