Increased imports from China expected to have little impact on inflation in the short term
News, Economic Commentaries The increase in tariffs has reduced US imports from China. Data shows that Sweden and the United States import similar goods from China, which suggests that China could fairly easily redirect its exports to the Swedish market through already established trade networks. Increased imports from China are not expected to have any major effect on inflation, but an increased supply of Chinese goods in the EU could increase competition for some Swedish export companies.
The authors of a new Economic Commentary use various data sources to analyse the trade links between China and Sweden, and what changes in trade between China and the United States could mean for the Swedish economy in the short term, with a focus on inflation and the competitive situation for Swedish exporters.
The analysis shows that Swedish imports from China are somewhat larger than traditional foreign trade statistics indicate and that Sweden and the United States import similar goods from China to a large extent. This suggests that it is relatively easy for China to redirect some of its exports to the Swedish market through lower import prices.
However, the import weight of China remains relatively small, which suggests that increased imports from there will not have a major impact on inflation. An increased supply of Chinese goods in the European Union (EU), which is Sweden's largest export market, and in Sweden will also affect Swedish producers, and competition for Swedish exporters can be expected to increase.
Authors: José Camacho and Caroline Flodberg, who work at the Monetary Policy Department
Economic Commentaries
Economic Commentaries are brief analyses of issues with relevance for the Riksbank. They may be written by individual members of the Executive Board or by employees of the Riksbank. Staff commentaries are approved by the relevant head of department, while Executive Board members are themselves responsible for the content of the commentaries they write.