Several themes seem to dominate much of the media coverage of China in the pre- and post-Covid-19 environment. They highlight the collapse of the Chinese economy, the collapse of exports from China and blame inflation on the supply and logistics chain issues.
Whilst there is an element of truth in all of these, they are also a little exaggerated. And that is an issue, because taken at face value, this impacts on the way business invests in or interacts with China. The reality is that China manufacturing and exports have stayed strong throughout the Covid-19 period. This is despite the disruption from the war in Ukraine. China exports as a percentage of total world exports have declined by less than 1% in the period of 2020 to 2021.
Ratings agency Standard & Poor estimate that in 2020, China exports represented 17.5% of world total exports, up from 16.25% in 2019. Despite all the problems of supply chains, China exports at the end of 2021 represented 17.4% or total world exports. According to China’s Ministry of Commerce, foreign direct investment rose by more than 17% year on year for the first four months in 2022 to US$87.77 billion ($122 billion). The largest increases came from South Korea +52.8%, the US +27.1% and Germany 21.4%.