China’s exports unexpectedly fell last month as shipments to the US slowed sharply, pointing to further weakness in the world’s second-largest economy and underlining a pressing need for more stimulus as the US-China trade dispute escalates.
Beijing is widely expected to announce more support measures in coming weeks to avert the risk of a sharper economic slowdown as the US ratchets up trade pressure.
On Friday last week, the Chinese central bank cut banks’ reserve requirements for a seventh time since early last year to free up more funds for lending.
Last month’s exports fell 1 percent from a year earlier, the biggest fall since June, Chinese customs data showed yesterday.
That is despite analyst expectations that a falling yuan would offset some cost pressure and looming tariffs might have prompted some Chinese exporters to bring forward or “front-load” US-bound shipments into last month, a trend seen earlier in the trade dispute.
China let its currency slide past the key seven per US dollar level last month for the first time since the global financial crisis, and Washington la belled it a currency manipulator.
Among its major trade partners, China’s exports to the US fell 16 percent year-on-year, slowing sharply from a decline of 6.5 percent in July. Imports from the US slumped 22.4 percent.
Many analysts expect export growth to slow further in coming months, as evidenced by worsening export orders in both official and private factory surveys.
More US tariff measures are to take effect on Oct. 1 and Dec. 15.
Exports to Europe, South Korea, Australia and ASEAN member states also worsened on an annual basis, compared with July, while shipments to Japan and Taiwan posted slightly better growth than the previous month.
Yesterday’s data also showed China’s imports shrank for the fourth consecutive month since April. Imports dropped 5.6 percent year-on-year, slightly less than an expected 6 percent fall and unchanged from July’s 5.6 percent decline.
Sluggish domestic demand was likely the main factor in the decline, along with softening global commodity prices. China’s domestic consumption and investment have remained weak despite more than a year of growth-boosting measures.
China reported a trade surplus of US$34.84 billion last month, compared with a US$45.06 billion surplus in July. Analysts had forecast a surplus of US$43 billion.
China’s trade surplus with the US stood at US$26.95 billion, narrowing from July’s US$27.97 billion, but still reached US$195.45 billion in the first eight months of this year, highlighting continued imbalances that have been a core complaint of US President Donald Trump in his administration’s negotiations with Beijing.
“The global economy is approaching the turning point of a recession, and external demand will for sure become worse and worse,” said Steven Zhang (章俊), chief economist and head of research at Morgan Stanley Huaxin Securities Co Ltd (摩根士丹利華鑫證券).
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