China’s exports shrank last month, the first such decline since mid-2020, customs authorities said yesterday, as a domestic slowdown and the threat of global recession hit international trade.
Exports fell 0.3 percent year-on-year, according to the Chinese General Administration of Customs, a steep drop from September’s 5.7 percent increase and well below analysts’ expectations.
Year-on-year imports were down 0.7 percent, negative for the first time since March this year and down from September’s 0.3 percent growth. That left a trade surplus of US$85.15 billion last month.
Photo: AFP
The slowdown in trade comes as global demand for Chinese products weakens, with energy prices soaring and the US facing a threat of recession.
Sporadic COVID-19 lockdowns have also hurt consumer enthusiasm and business confidence in the world’s second-largest economy.
Analysts surveyed by Bloomberg forecast export growth of 4.3 percent last month, but expected only 0.1 percent growth in imports in the face of weakening demand at home.
Exports to the US and Europe both fell, the data showed, as did shipments to Taiwan and Hong Kong.
However, demand from Southeast Asia continued to be strong, with exports to ASEAN countries rising by double digits for a sixth month, customs data showed.
The value of home appliance exports fell the most of any product group in the first 10 months of the year, down 11.5 percent from a year earlier, according to a breakdown provided by customs.
Exports of furniture, lighting equipment and medical devices also dropped during the period.
The decline in imports was widespread, with Chinese purchases from Taiwan, Australia, the US, Japan and South Korea all down. Imports of iron ore in the first 10 months were down compared with last year as the continued drop in housing construction diminishes demand for steel and other construction materials.
“The recent decline in export volumes appears to reflect a reversal in the pandemic-era surge in global demand for Chinese goods,” Capital Economics analyst Zichun Huang (黃子春) said in a note yesterday.
Import volumes are “likely to continue weakening given the challenging domestic outlook” Huang said.
Nomura Holdings Inc analysts yesterday said they expect China’s export downturn to extend over the next two months.
“As strong export growth has been the single-largest GDP growth driver in China since spring 2020, the contraction of exports will inevitably weigh on growth, employment and investment,” they said.
Authorities had previously said that the momentum was expected to weaken further.
“The risk of external demand growth slowing is increasing” in the fourth quarter, Chinese Ministry of Commerce spokesperson Shu Jueting (束?婷) said at a regular briefing last month.
The environment for trade is becoming increasingly complex for China, and uncertainties are also increasing, she said, citing slowdown in world economic and trade growth.
Additional reporting by Bloomberg
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