India Became Shanghai’s 8th Largest Trade Partner in 2016

According to Shanghai Customs statistics, in 2016, Shanghai Customs District had export-import trade with India totaling RMB 138.21 billion yuan, up 7.3% year-on-year (YOY), the proportion rising from 2.5% of last year to 2.6% of Shanghai’s total foreign trade, making India the 8th largest trading partner of Shanghai instead of Australia. Therein, its export to India reached 111.34 billion yuan, up 11.2% YOY; import from India reached 26.87 billion yuan, down 6.4% YOY; trade surplus was 84.48 billion yuan, an increase of 18.2% YOY.

1. Characteristics of Shanghai Trade with India in 2016:

(1) December export YOY growth narrowed significantly, while import increasing YOY. In December 2016, Shanghai Customs recorded 13.91 billion yuan of trade value with India, up 10.4% MOM and up 18% YOY; therein, export to India reached 10.08 billion yuan, down 2.7% MOM and up 16.3% YOY, the growth narrowed by 12.4 percentage points from November; import from India reached 3.83 billion yuan, up 70.7% MOM and up 22.6% YOY. (see the chart below.)

(2) Ordinary trade proportion improved, and Customs special control declined in the import and export. In 2016, Shanghai-India ordinary trade reached 104.82 billion yuan, up 13% YOY, accounting for 75.8% of the total value, the proportion increased by 3.9 percentage points. In addition, the import and export under Customs special control reached 12.61 billion yuan, down 16.2% YOY, the decline bigger by 8% than last year.

(3) Private enterprises’ trade value took the first place, while foreign-invested and state-owned enterprises declined. In 2016, through Shanghai Customs, Chinese private enterprises had 59.4 billion yuan of trade value with India, up 21.1% YOY, accounting for 43% of the total value; foreign-invested enterprises had 58.02 billion yuan with India, down 1.2% YOY, accounting for 42%; state-owned enterprises had 20.72 billion yuan with India, down 1.4% YOY, accounting for 15%.

(4) Export of electromechanical products increased in proportion, with solar-cell increase substantial. In 2016, Shanghai exports of electro-mechanical products to India totaled 63.42 billion yuan, up 18.3% YOY, accounting for 57% of the total export, the proportion increased by 3.4 percentage points YOY. Therein, solar-cell export reached 9.23 billion yuan, a substantial increase of 62.3% YOY; export of automatic data processing equipment and components reached 4.01 billion yuan, down 23.9% YOY; export of traditional labor-intensive products (clothing, textiles, footwear, plastics, furniture, bags, and toys) totaled 10.02 billion yuan, up 1.3% YOY, accounting for 9%, in which textiles were worth 7.39 billion yuan, down 0.2% YOY.

(5) Diamonds became the largest import, and clothing import increased faster. In 2016, Shanghai imported from India 8.36 billion yuan worth of diamonds, a substantial increase of 54.1% YOY, accounting for 31.1% of the total import as the largest import instead of copper; imported unwrought copper and copper products worth 6.03 billion yuan, down 18.7% YOY, accounting for 22.5%. In addition, import of textiles reached 2.44 billion yuan, down 41.2% YOY; import of clothing and accessories reached 740 million yuan, up 23.8% YOY.

2. Causes of the Export-to-India Growth in 2016:

(1) India's economy was overall good, having more demand for Chinese exports. Indian statistics showed that India's GDP growth was 8.2% and 7.3% respectively in the third quarter and fourth quarter. The International Monetary Fund predicted India's GDP to be $2.25 trillion in 2016 and economic growth 7.6% for 2016-2017.

(2) The steady Sino-Indian relationship led to bilateral trade development. In 2016, high-level governmental interactions were frequent between the two countries, helping bilateral trade growth.