China’s H1 2023 Economic Indicators

China's Economic Performance Indicators, First Half H1 2023

China’s H1 2023 Economic Performance is marked by growth in foreign trade, a surge in automobile sector exports, mild inflation, and a decline in producer prices. Foreign trade grew by 2.1% YoY, exports rose by 3.7% YoY, while the Consumer Price Index (CPI) rose by 0.7% in the year’s first half. However, the Producer Price Index (PPI) for manufactured goods decreased by 5.4% YoY in June. The ASEAN bloc remained China’s top trading partner, while electromechanical products remained the dominant export. The freight train services between China and Europe increased by 16% YoY. Furthermore, consumer confidence in Shanghai showed significant growth, reflecting positive sentiment toward the country’s economic recovery.

Brief Summary 

  • China’s foreign trade grew by 2.1% YoY to reach 20.1 trillion yuan in H1 2023
  • Exports rose by 3.7% YoY to 11.46 trillion yuan in the first half of 2023, while imports decreased slightly by 0.1%
  • The ASEAN bloc remained China’s largest trading partner.
  • China’s exports of electromechanical products, accounting for 58.2% of total exports, increased by 6.3% YoY to 6.66 trillion yuan.
  • Exports of New Energy Vehicles (NEVs) increased by 160% YoY to 534,000 units, with Belgium, UK & Thailand among the top.
  • China’s Consumer Price Index (CPI) remained flat in June 2023
  • The lowest Producer Price Index (PPI) in 7 years decrease by 5.4%
  • China led the world in IPO activity, accounting for nearly half of the global total.

According to the General Administration of Customs, China saw a 2.1% year-on-year (YoY) growth in foreign trade. Specifically, the export sector led the way with a 3.7% YoY increase, despite a marginal 0.6% YoY decrease in imports. ASEAN bloc continued to be China’s largest trading partner in H1 2023, with imports and exports expanding 5.4% year-on-year to 3.08 trillion yuan, accounting for 15.3% of China’s total foreign trade volume. This reflects the deepening economic relationship and the strategic importance of ASEAN in China’s foreign trade dynamics.


ASEAN & China 2023


Notably, the foreign trade performance’s robustness was underlined by the exceptional growth of 21.6% YoY in automobile exports, primarily led by new energy vehicles (NEVs). Total vehicle exports rose to 2.14 million, with passenger vehicles accounting for 1.78 million units, marking an 88.4% year-on-year increase. Meanwhile, NEV exports soared by 160% year-on-year, reaching 534,000 units. Chinese automakers are expanding globally, with companies like GAC, SAIC Motor, and Zeekr announcing plans to enter or grow in international markets. According to the General Administration of Customs, China has emerged as the world’s second-largest vehicle exporter, with Russia, Mexico, Belgium, the UK, and Thailand among the top destinations for Chinese vehicles.  

Is China nearing Deflation? Inflation indicators stir deflation debates.

As nations across the globe grapple with spiraling inflation, China is at the grips of a different problem: persistent deflation. The Consumer Price Index (CPI) for June registered no growth compared to last year’s period, a stark contrast to the 0.2% annual gain seen in May. The CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services, which can include items such as food, clothing, transportation, and medical care. It is primarily used to gauge the cost of living and to evaluate inflation levels. When CPI increases, it signals inflation, meaning consumers pay more for the same basket of goods and services. Conversely, a decrease or stagnation in CPI can indicate deflation or disinflation.

Producer prices took a different turn as the Producer Price Index (PPI) for manufactured goods in China decreased by 5.4% YoY in June, the sharpest decline in over seven years. This trend was primarily due to a substantial decline in raw materials prices and weakening demand from manufacturers.  A falling PPI can suggest weakening demand for goods and services, potentially signaling an economic slowdown. 


China's PPI 2023
A most active market for IPOs in the H1 2023 & Increased Consumer Confidence 


China’s stock markets dominated the global IPO rankings in H1 2023. Chinese companies raised $31.3 billion from IPO flotations on the Shanghai, Shenzhen, and Beijing exchanges. The country’s capital market reforms, which included implementing stricter information disclosure standards and removing administrative caps on new share prices, bolstered this success. Despite a generally sluggish trading environment within China’s stock markets, the rise of companies, particularly within the artificial intelligence sector, demonstrated investors’ readiness to support fundraising efforts.

Meanwhile, consumer sentiment, another critical economic indicator, has seen an encouraging surge, particularly in Shanghai. The Index of Consumer Sentiment in the city soared 10.5 points from the first to the second quarter of 2023, hitting 122.3 points. This surge reflects a heightened sense of optimism among consumers about the economic situation. When consumers are confident, they tend to spend more, further stimulating economic growth.

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