China's export growth to Southern Hemisphere countries more than compensated for the sharp decline in shipments to developed markets such as the US, EU and Japan.

In yuan terms, China's exports grew by 10.3% year-on-year, with exports to southern hemisphere countries such as India, Brazil, Indonesia, Vietnam, and South Africa growing by 20% to 40%. This more than compensated for the sharp decline in shipments to developed markets such as the US (-7%), EU (-6.8%) and Japan (-2.5%).

The biggest gains were recorded by BRICS members India (+16%), Brazil (+37.1%) and South Africa (14.8%), as well as Vietnam (+28.4%) and Indonesia (+22.2%).

At the end of 2022 and in 2023, China's exports to countries in the Southern Hemisphere exceed those to all developed markets.

Preliminary data for January-February suggest that this trend is accelerating.

Chinese investment in the Global South through the Belt and Road Initiative and private channels is partly responsible for this success. 2023 saw Chinese outward investment in the Asia-Pacific region jump 37 percent to $20 billion, as William Pesek wrote in the Asia Times on March 11, 2024, and China's outward investment in the Asia-Pacific region has risen to $20 billion. As William Pesek wrote in the Asia Times on March 11, 2024, "reshaping the global economy".

China dominates supply chains in key industries such as telecommunications equipment, solar panels, and especially electronics. "Repatriation" and "friendlies" are increasingly channeling Chinese trade through third parties, notably Mexico, India and Vietnam.

China ships semi-finished products and components to third countries for final assembly before exporting them to the United States. As the Bank for International Settlements has written: Companies from other jurisdictions have intervened in the supply chain from China to the United States. The identity of the companies that have intervened in this way can be seen in the fact that companies from the Asia-Pacific region make up a larger proportion of suppliers to U.S. customers than they did in December 2021, and a larger proportion of suppliers to U.S. customers.

The World Bank economists put it this way: U.S. imports from China are being replaced by imports from large developing countries with clear comparative product advantages. The countries that are replacing China tend to be deeply integrated into China's supply chain, and imports from China are growing faster, especially in strategic industries. In other words, in order to replace China in terms of exports, countries must embrace China's supply chains.