China’s imports of U.S. agricultural products in the first half of this year have exceeded the total for 2019. As of September 2022, the total value of U.S. agricultural exports to China increased by 16% year-on-year, of which soybean exports increased by 58%, and cotton and sorghum exports were also higher than in 2021. At the same time, exports of pork, corn, and wheat declined, mainly due to the increased domestic production, the increased import tariffs, and the weakened Yuan against the U.S. dollar.
Since April, the Chinese Yuan has continued to weaken against the U.S. dollar, gradually changing from a record low of 6.30 Yuan to a new high of 7.11 Yuan, during which the Yuan depreciated by 13% against the dollar. This means that the price of U.S. exports to China has generally increased by 13%, and the Yuan depreciation cycle is likely to continue until 2023 mainly due to the Federal Reserve’s continued interest rate hikes.
In the third quarter of this year, China’s economic growth rate is expected to achieve 3.2%, Q4 is expected to rise by 4.8%, and the whole of 2022 is expected to rise by 3.3%. The economic growth rate is expected to achieve 5.8% in 2023.
China will convene the 20th Party Congress from October 16 to 23 to elect new national leaders who will take office in March 2023. It is very likely that the existing pandemic control policy will remain until next March. However, international travel restrictions and mandatory quarantine times are expected to be further eased. The current regulations require international visitors to quarantine for 3+7 days, which is expected to be shortened to a more acceptable number before long given Hong Kong’s experience.