The latest edition of the CBBC China Trade Tracker shows that UK-China trade ties remained resilient in the face of economic and political headwinds in 2023
Although the year was challenging for both countries – China’s economy did not “rebound” as expected following the lifting of pandemic restrictions in late 2022, and the UK’s GDP grew by just 0.4% amidst lingering inflation and high interest rates – UK goods exports to China rose 0.9% to £22.4 billion (according to ONS data), reversing the decline seen in 2022. It’s worth noting that HRMC, which calculates differently, showed goods exports falling 1.6% to £21 billion. Imports fell by 11.1%, resulting in an £8 billion cut to the UK-China goods trade deficit.
Overall, China remained the UK’s third-largest trading partner, with total two-way trade in goods and services amounting to over £105 billion.
The tracker shows trade with China has the potential to be a key driver of regional growth in the UK. According to HMRC data, UK goods exports to China generated £16.5 billion in wealth for regional economies outside of London.
Notably, the Midlands emerged as a trade powerhouse in 2023. The East Midlands’ and West Midlands’ trade exports to China generated £6.7 billion over the year, growing faster than any other UK region individually dethroning London to become the UK’s top exporters. The other two regions that saw positive growth in their exports to China were the South West and Northern Ireland.
In terms of goods categories, “Power Generating Machinery & Equipment” rocketed 48% to £4.45 billion, surpassing the previous number one category “Road Vehicles”, which grew from £3.7 billion to £3.8 billion.
“These numbers highlight China’s vast potential as a market for UK goods,” says Rob Ismay, Interim Chief Executive at the China-Britain Business Council. “With a land area 39 times that of the UK, 160 cities with populations exceeding one million, and as the home of 20% of the world’s middle class, China continues to be an attractive export destination for British products.”
The China Trade Tracker was launched by the China-Britain Business Council (CBBC) in 2021 as a reference tool providing the facts and figures about UK-China trade, and how Britain’s regional economies are impacted by their trade with the world’s biggest market. It is updated on a half-yearly basis.
Issue Nine of the Tracker provides an overview of goods trade between 12 UK regions and China in 2023. Unless stated otherwise, references to China in this report include Hong Kong.
Click here to read Issue 9 of the China Trade Tracker
