7th June 2023: import and export in May, Caixin PMI, local government debt

This episode contains China’s import and export data in May; China-European Business Forum organised by the Tianjin Municipal Government, with comments from Christoph Schrempp, chair of the European Chamber’s Tianjin Chapter; manufacturing and services activity data in May released by Caixin; and Rhodium Group’s report on local government debt and China’s economic growth prospect. From the Chamber side, join the event on 13th June on the latest status and trends of COVID-19 in China and hear from experts about health and HR advice.

Read more:

May foreign trade data (in Chinese):


China-European Business Forum in Tianjin


Caixin China General Manufacturing PMI


Caixin China General Services PMI


Rhodium Group report on local government debt

Chamber event: COVID again? Latest insights and business advice from experts



RUI: Hello and welcome to China Shortcuts,

MARIANN: the European Chamber’s weekly catchup on China’s business landscape.


RUI: China’s exports unexpectedly dropped sharply year-on-year, while the contraction of imports continued at a softer pace in May.

MARIANN: Data released by China’s General Administration of Customs on 7th June showed that the total value of China’s exports in US dollar terms fell 7.5 per cent in May compared to a year ago. This was contrary to analysts’ forecasts that predicted a deceleration of growth following two months of continued expansion. The total value of imports shrank 4.5 per cent in May. While this was milder than the decline recorded in April, notably, imports have been contracting for the seventh month in a row. China’s foreign trade deficit dropped to the lowest level in over a year, amounting to 65.8 billion US dollars.


RUI: On 2nd June, Tianjin’s municipal government held an event to promote European-Chinese business cooperation.

MARIANN: According to the organisers, the China-European Business Forum was meant to provide a platform for exchange between European and Chinese entrepreneurs and strengthen communication between European businesses and the municipal government.

RUI: Sharing his insights about the event is Christoph Schrempp, chair of the European Chamber’s Tianjin Chapter.

CHRISTOPH SCHREMPP: On June 2nd, together with the national vice president and chairman of the South [China] Chapter, Klaus Zenkel, I attended the China-European Business Forum in Tianjin. The officials from the Tianjin Municipality highlighted the various benefits of settling down as a foreign-invested company in Tianjin, and the preferential policies in place. They also reported 5 billion RMB for investment in Tianjin and a GDP growth that fort the first quarter in 2023 was 5.5 per cent. Vice President Zenkel highlighted that after COVID-19 and under the given geopolitical circumstances, European trust in China must be regained as a basis for further investment. I was referring to the second Tianjin local position paper and highlighted the enhancement of the cooperation between universities and the European companies in the field of R&D and further support to attract and retain talent.


RUI: After China’s official statistics indicated a contraction in manufacturing activity in May, the Caixin manufacturing purchasing managers’ index or PMI showed a different picture.

MARIANN: Released on 1st June, the Caixin data signaled that manufacturing activity expanded for the first time in three months in May, and at a pace that exceeded market expectations. The discrepancy in the results might be due to the different sample sizes and scope of the surveys that the data is derived from. China’s National Bureau of Statistics surveys over 4,000, mostly larger, companies to calculate the official PMI, while the Caixin PMI is based on data from a panel of about 650 private and state-owned manufacturers. The Caixin dataset indicated an uptick in demand, which led to a strong rise in production. Despite the better-than-expected performance, however, business confidence about the year ahead slipped to a seven-month low. This was reflected in manufacturing companies’ hiring activity as well, with staffing levels falling at the fastest pace in over three years in May.

The Caixin services PMI, released separately on 5th June, signalled an increasingly strong recovery in services activity in May. Survey respondents indicated a sharp rise in demand and improved business confidence about the 12-month outlook.


RUI: According to a report launched by the Rhodium Group on 1st June, the financial distress of China’s top cities is the primary reason that there has been no meaningful fiscal support for the country’s recovery this year.

MARIANN: The Rhodium Group found that in 2022, of the top 20 cities, 19 were facing worse conditions than in the year prior. Their interest coverage ratio, which is used to determine how easily they can pay interest on their outstanding debt, has decreased sharply. This happened mainly as a result of official fiscal revenues taking a hit from tax exemption measures last year. Although interest rates have declined, total interest expenses still increased in 2022 along with the rise in overall debt levels. The Rhodium Group predicts that over the next two years, local government debt restructuring and Beijing’s approach to the role of local government investment within China’s economy will be key factors impacting the country’s economic growth.


RUI: China declared victory over COVID-19 on 16th February this year, and indicated its borders would reopen to the world. And in early May, the World Health Organization announced that the COVID-19 pandemic would no longer be considered a public health emergency of international concern.

MARIANN: However, since the reopening of the country, a second wave of COVID-19 infections has recently hit China. This wave is expected to peak in June, with estimates that 65 million people a week will be infected by the end of the month.

RUI: Join our event on 13th June to find out about the latest status and trends of COVID-19 in China. Experts will answer questions about vaccinations and medicines and give advice on related HR practices.


MARIANN: Thanks for listening. Tune in again next week.

RUI: In the meantime, please find useful links in the episode notes.

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