China's Commodities Imports Resilient Amidst Stimulus Uncertainty

China's commodities imports have shown remarkable resilience despite global economic headwinds and domestic fiscal challenges. In the first half of 2023, China's foreign trade in goods reached a historical high of 20.1 trillion yuan ($2.8 trillion), up 2.1 percent year-on-year. This performance is attributed to the country's trade with emerging markets, which continued to grow, and the improvement in trade quality amid a continuing economic recovery and industrial chain upgrading.

China's commodities imports have remained robust, with a focus on key partners. In 2023, China's trade with Belt and Road Initiative (BRI) countries climbed 2.8% year-on-year to 19.47 trillion yuan, accounting for 46.6% of China's total foreign trade. Imports and exports with Latin America and Africa reached 3.44 trillion yuan and 1.98 trillion yuan, up 6.8% and 7.1%, respectively. Meanwhile, trade with the EU and the US reached 5.51 trillion yuan and 4.67 trillion yuan, accounting for 13.2% and 11.2% of China's foreign trade, respectively.


China's domestic demand, particularly in the property sector, plays a crucial role in shaping commodities imports. Despite economic slowdown and property sector crisis, China's total imports and exports reached 41.76 trillion yuan ($5.88 trillion) in 2023, up 0.2% year on year. Imports of bulk commodities increased rapidly by 17.1%, with energy products up 33.2% and consumer goods up 6.6%. However, the property sector, a crucial driver of metals demand, remains a drag on growth due to excess housing inventories and stagnant prices. Until the market sees signs of a sustainable recovery in the property sector and economic growth, long-term moves higher for industrial metals may be challenging.


Global supply chain disruptions and geopolitical tensions have significantly impacted China's commodities imports, shaping its resilience in the face of uncertainty. The COVID-19 pandemic and geopolitical conflicts have led to supply chain bottlenecks and price volatility, challenging China's reliance on imports for key commodities. However, China's strategic stockpiling and diversification of suppliers have helped mitigate these challenges, demonstrating resilience in its commodities imports.

China's fiscal stimulus measures, while supporting the economy, have not yet significantly impacted the balance of trade or trade imbalances with other major economies. As markets await more concrete spending proposals, commodities prices remain volatile, with iron ore and copper futures experiencing roller-coaster trajectories this year. To address global economic imbalances, a unified solution is needed to encourage China's fiscal support for households and promote a more balanced approach to trade.

In conclusion, China's commodities imports have remained resilient, but the impact of fiscal stimulus measures on global commodities prices and their volatility is yet to be fully realized. As China's economic challenges persist, investors will continue to watch for details and a price tag for enhanced fiscal measures, which could significantly influence global commodities markets.