China’s exports last month fell further as global demand continued to drop, adding to pressure on the economy as it charts a hasty, uncertain path out of the country’s “zero COVID-19” policy.
Exports in US dollar terms last month fell 9.9 percent from a year earlier, the Chinese General Administration of Customs said yesterday.
That beat economists’ estimate for a 11.1 percent drop and compared with a decrease of 8.7 percent in the previous month. For the whole of last year, exports rose 7 percent to a record US$3.6 trillion.
Photo: REUTERS
Imports shrank 7.5 percent, better than the median estimate of a 10 percent drop.
That left a wider trade surplus of US$78 billion last month, customs data showed.
For the full year, China still posted a trade surplus of US$878 billion, a record high.
Photo: REUTERS
“Both the weakening global demand and the wave of COVID outbreak” likely contributed to the decline in exports last month, Pinpoint Asset Management Ltd (保銀私募基金管理) president and chief economist Zhang Zhiwei (張智威) said. “The weak export growth highlights the importance of boosting domestic demand as the key driver for the economy in 2023.”
Export growth was robust for most of last year, providing some support for the world’s second-largest economy as it was hit by a housing market slump and weak consumer demand.
However, the trend began to reverse in October as COVID-19 pandemic-fueled demand waned and central banks around the world hiked interest rates to curb surging inflation.
Disruptions from COVID-19 outbreaks in China also snarled supply chains, weighing on exports.
“Disruptions from the virus surge following the end of COVID zero were part of the picture, but the bigger issue is slowing global demand. This means domestic investment and spending will have to carry more weight. We think the damage from the current COVID wave will pass quickly and that China’s policy pivot toward reopening will allow domestic activity to pick up,” Bloomberg China economist Eric Zhu (朱懌) said.
Last year “was a miserable year,” said Jin Chengmei, 32, manager of Meimei Toys Co (美美玩具), in the eastern city of Yiwu.
The company sells dolls and toy cars to the Middle East.
She said the company’s export revenue last year declined 20 percent from 2021.
Jin said that business this year would “probably be difficult,” but she was hopeful that things would improve now that overseas clients can travel to China.
“Otherwise I really think we will enter an economic recession,” she added.
While authorities have taken some measures to support exporters — including sending officials on chartered flights to meet overseas clients — net exports are expected to be a concern this year, likely accounting for either a smaller portion of growth or even becoming a drag.
Jones Lang Lasalle Inc chief economist and head of research for Greater China Bruce Pang (龐溟) said he expects exports to drop about 3 percent this year, while imports are projected to fall 1 percent.
The customs administration yesterday said that foreign trade would this year still face pressure before the economic recovery solidifies.
The downward pressure on the global economy continues to increase, agency spokesperson Lyu Daliang (呂大良) told a news briefing.
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