Economic Institution: The value of China’s exports to Iraq increased by 93% in 10 years

Economic Institution: The value of China’s exports to Iraq increased by 93% in 10 years

2024-05-18 02:38

Economic Institution - The value of Chinas exports to Iraq increased by 93 percent in 10 yearsShafaq News/ The “Future Iraq” Foundation for Economic Studies and Consultations reported on Saturday that the value of Chinese exports of direct goods to Iraq increased by 93% during ten years extending from 2015 to 2024, warning that this significant increase in imports will bring the country to The stage of its inability to cover the increasing demand for foreign currency.

According to a report published by the corporation today, the total value of direct Chinese exports to Iraq in 2015 amounted to 7.9 billion US dollars, while it is expected to reach the end of 2024, according to data for the first months of the current year, at a value of 15.3 billion US dollars.

The report said that exports of mechanical devices and equipment, which mainly include (air conditioning and refrigeration equipment), which represent 20% of China’s total exports to Iraq, increased by 162%, as in 2015 they represented a value of 1.4 billion US dollars, while they are expected to arrive in By the end of 2024, it reached more than 3.7 billion US dollars.

Exports of electrical appliances, which represent 14% of the total value of Chinese exports to Iraq, also increased by 77%, as they represented a value of one billion US dollars in 2015, and are expected to reach 1.9 billion dollars by the end of 2024, according to the corporation’s report.

The report indicated that the greatest growth was in China’s iron and steel exports, as the growth rate reached 280% compared to 2015, when the value of China’s iron exports to Iraq amounted to 131 million US dollars, and it is expected that by the end of 2024 it will reach a value of 500 million US dollars.

China’s exports of rubber materials, specifically tires, also increased by 195%, as the value of China’s exports in 2015 was $151 million, while they are expected to reach $446 million at the end of 2024, according to the report.

The Corporation attributed this increase in Chinese exports to several reasons, namely, the increased demand for various goods as a result of the increasing population growth and the expansion of construction in various Iraqi cities, as well as the fact that many Chinese goods were not shipped directly from China, but rather from other countries and were now exported directly from China.

Among those reasons mentioned in the report are the re-export of many goods exported to Iraq to other countries and their use in the barter system with those countries, especially countries with which banking is prohibited, and the change in the consumption pattern of the Iraqi consumer.

The corporation went on to review these reasons, and said, and pointed to the direct Chinese investments of Chinese companies in various sectors, which contributed to limiting the imports of some goods, such as iron and steel, from the Chinese side, in addition to the entry of the Chinese side into competition with some goods in which it did not have large market shares. Such as cars and telephones, with global inflation rates that led to a rise in global commodity prices.

The report warned that, according to these growth rates, it is expected that the volume of Iraq’s exports from China alone by the end of 2030 will reach approximately 20 billion US dollars, warning that this significant increase in imports will bring Iraq to the point of being unable to cover all this increasing demand from Foreign currency, especially if Iraq’s oil exports to China have remained stable at daily rates amounting to only 1.1 million barrels over the past five years, and there is uncertainty about the continuation of oil prices at current rates.

In its report, the institution expected that the trade balance would shift from a positive balance in favor of Iraq to a positive balance in favor of China in the coming years, stressing that it is necessary to activate trade exchange mechanisms with China through which reliance is placed on creating a reserve fund in which a portion of sales funds will be placed. Iraqi oil to China, and it is used to cover imports from China instead of the complex mechanism that occurs now.

The report concluded that it is necessary to work on analyzing these imports, and try to reduce some of them by transferring part of the manufacturing or assembly to inside Iraq, to ​​reduce the added value that Chinese factories place on their products, and thus reduce the value of imports from China, specifically in the most important goods. Such as mechanical and electrical devices, tires, and the like.