China | No signs yet of a decoupling from the rest of the world

We recently concluded that, judging by China’s export performance in the last two years, there is little evidence so far that developed countries are decoupling from the country. But what about decoupling by China?

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• The importance of international trade to China’s economy has declined since the mid-2000s, driven by relative price changes and the economy outgrowing international trade.
• China’s real overall imports started to lag total final expenditure in around 2015, due to a sluggish processing sector. But “normal” imports used in the domestic economy have continued to grow, broadly in line with domestic demand.
• Nonetheless, some countries have done much better than others exporting to China. The North American share of imports to China has fallen amid the US-China trade war. And while Europe’s – and in particular Germany’s – share has risen since 2007, Japan, South Korea, and Taiwan have fallen amid sluggish processing trade. ASEAN’s has also risen, with Vietnam’s share having surged.