11th June 2025: Jan-Apr Services Trade

RUI: According to a statement shared by the Ministry of Commerce on 6^th June, China’s services trade grew rapidly in the first four months of 2025, with China’s trade deficit declining substantially compared to the same period last year.

MARIANN: While exports still made up less than half of the country’s services trade, their total value increased more than 14 per cent year-on-year. The total value of services that China imported in the January-April period also rose, but much more modestly at nearly 4 per cent. This resulted in China’s overall services trade deficit decreasing by almost 19 per cent year-on-year. Travel services exports saw the fastest growth among all services segments, increasing by almost 80 per cent year-on-year.

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RUI: Data released by China’s customs authorities on 9^th June showed that the country’s export growth slowed further in May from the past two months, while the fall in its imports accelerated.

MARIANN: The total value of China’s exports in US dollar terms increased 4.8 per cent year-on-year in May, with the pace of growth dropping sharply from the 8.1 per cent recorded in April. A key factor behind the slowdown was a significant drop in China’s exports to the US over the past two months. Compared to March, when China’s exports surged 12.4 per cent as many exporters rushed to get their shipments out before US President Donald Trump’s promised announcement of tariffs in April, China’s total exports to the US decreased 28 per cent by May. This fall was partially offset by a rise in exports to other markets. China’s exports to the EU increased 15 per cent during the same period.

The total value of imports dropped 3.4 per cent year-on-year, with the pace of decrease accelerating from the previous month. Here, again, the decrease in imports from the US was a contributing factor, falling 13 per cent from March to May. However, the decline was not unique to US imports, as even China’s imports from members of the Association of Southeast Asian Nations decreased 11 per cent during the same period amid weak domestic demand.

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RUI: Data published by the statistics bureau on 9^th June revealed that deflationary pressures in China intensified in May, as producer prices entered their 32^nd consecutive month of decline and consumer prices also dropped for the fourth month in a row.

MARIANN: Producer prices fell 3.3 per cent year-on-year, which was the sharpest decrease recorded since July 2023. The statistics bureau attributed this primarily to a significant decline in the prices of production materials. Consumer price deflation remained minimal at 0.1 per cent year-on-year. However, the reading came on top of an already low base from last year and marked the fourth consecutive month of decline. A key factor behind this was a drop in food prices and consumer goods prices, which was offset somewhat by an increase in prices for services.

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RUI: On 7^th June, China’s Ministry of Commerce issued a statement on its website, answering questions from media about the meeting that took place on 3^rd June between Minister of Commerce Wang Wentao and European Commissioner for Trade Maroš Šefčovič in Paris.

MARIANN: Topics discussed during the meeting included the ongoing negotiations of electric vehicle price commitments, China’s anti-dumping probe into EU brandy and its export controls on rare earth minerals. The statement highlighted that China plans to issue a final announcement about the brandy probe by 5^th July. Regarding export controls, the Ministry said it attaches great importance to the concerns raised by the European side and is willing to establish a green channel for eligible applications to speed up the approval process. The Chamber has been in regular contact with the Chinese authorities on this issue, and will continue to monitor the situation and make constructive recommendations based on industry realities.

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RUI: This year marks the 50^th anniversary of the establishment of diplomatic relations between the European Union and China. It is a milestone that highlights the long-standing and evolving partnership between these two major global players. The 50^th anniversary is a testament to the enduring and fruitful cooperation that has been built over the years.

MARIANN: Over the past five decades, EU-China relations have grown and diversified significantly. The partnership has evolved from a primarily trade-focused relationship to one that encompasses a wide range of areas, including technology, environmental protection and cultural exchanges. As European businesses eye opportunities in China and Chinese businesses accelerate their expansion into the European market, the need for strong and effective collaboration is paramount.

RUI: Join us for a special Business Reception on 17^th June in Beijing celebrating this significant milestone in EU-China collaboration. This event is an effective platform for facilitating communication and cooperation between multinational enterprises. Don’t miss this exceptional opportunity to connect, learn and chart your path to success with industry leaders, entrepreneurs and business partners, old and new, in a relaxed and elegant atmosphere.

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MARIANN: Thanks for listening, and don’t forget to tune in again next week.

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

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