What’s driving China’s trade resilience? We break down the latest numbers with Shan Saeed, Global Chief Economist at Juwai IQI.
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00:00Now we're here to unpack China's trade statistics for April.
00:03We have Shan Seyed, Global Chief Economist at UAIQI.
00:07Now, Shan, despite U.S. tariffs on Chinese goods,
00:11China's exports grew by 8.1% in April, far exceeding expectations.
00:16So what factors do you think help Chinese exporters maintain this resilience
00:20and can it actually be sustained in the long term?
00:24Shan?
00:25I think Chinese have shown remarkable resilience
00:28in diversifying very quickly
00:30and they are moving most of the trade and commerce
00:33to Southeast Asia, Europe, Africa, and GCC.
00:37And if you look at these combined regions,
00:41ASEAN, GCC, Africa,
00:43so they combine together around 2.5 billion population along with Europe.
00:51So that contributes significantly to the overall export outlook
00:56and that clearly demonstrates that the Chinese are pretty smart
01:01and they have already planned how to move away from these tariffs
01:07and they have navigated it quite significantly.
01:12Moving forward, I think it is sustainable
01:15because China has a close relationship with ASEAN,
01:20they have a close relationship with Africa, GCC, and Europe.
01:23And in all these countries, they have a few things in common.
01:29They have rising economies, they have macroeconomic stability,
01:36they have growing infrastructure,
01:39and above all, they have the desire to have strong relationship with China in the long run.
01:48So I think all these economies, the regions,
01:52they want to continue their trade relationship in the long run.
01:56Right.
01:57Looking at this region, Shan,
01:59while China's exports to the U.S. dropped by 21%,
02:03export to ASEAN actually surged by 20.8%.
02:07Does this actually signal a clear shift in China's trade strategy towards this region?
02:12And within ASEAN, you feel which countries do you see becoming even more important
02:16for China's growth and why?
02:19Absolutely.
02:20The largest increase in outbound shipment went to Indonesia, Thailand, and Vietnam.
02:27And if you look at these regions, I was in Indonesia last week,
02:30and I can tell you what's happening in Indonesia.
02:33Indonesia right now is booming.
02:34So Indonesia, 278 million, Vietnam, 100 million population, Thailand, 72 million population.
02:42So China wants to deal with those countries where demographics are big,
02:47where they have leadership, where the young population is strong,
02:52and above all, they have the infrastructure and macroeconomic stability.
02:57So China is quite bullish.
02:58And the recent visit of President Xi Jinping to Malaysia, to Vietnam, and Cambodia
03:05is a clear signal that Chinese have clearly pivoted towards ASEAN,
03:11which is the growth region with 620 million population,
03:16GDP size touching almost $4 trillion by the end of this year.
03:20So China has made it very clear that they want to move into this region
03:26where income levels are rising.
03:28The leadership of various governments are committed to having long-term relationships.
03:34And above all, the macroeconomic stability is one of the key factors
03:38that make China to come to this part of the world.
03:43Right.
03:44Shan, your input on Malaysia.
03:46What role do you think Malaysia can play in helping position ASEAN
03:49as a major global economic force?
03:53And how can we make sure this leads to long-term resilience and prosperity for the region?
03:59I think the recent visit of Chinese President to Malaysia
04:02has given a lot of leverage to Malaysia.
04:06And it has clearly given Malaysia a clear advantage in the ASEAN region
04:11that Malaysia is playing a key role in bringing all the ASEAN countries together,
04:18leading from the front.
04:19And this gives a limelight in the last two, three months.
04:24You have seen all the global newspapers, local newspapers.
04:27They're all talking about Malaysia.
04:29Global companies are moving into Malaysia.
04:31FDI is coming into Malaysia.
04:33So obviously, Malaysia has got a clear advantage in all this situation.
04:39And it helps the population at the macro level.
04:44Right.
04:45Thank you so much, Shan.
04:46That was Shan Saeed from Juei IQI.