China’s exports fell last month for the first time since February, data showed yesterday, breaking a two-month growth streak as a post-COVID-19 rebound faded and adding to speculation that officials would unveil fresh stimulus measures.
Rising global inflation, the threat of recession elsewhere and geopolitical tensions with the US have weakened demand for Chinese products.
That resulted in overseas shipments sinking 7.5 percent year-on-year last month, Customs figures showed, marking a sharp drop from an increase of 8.5 percent in April and much steeper than the 1.8 percent forecast in a Bloomberg survey.
Photo: AFP
However, exports to Russia rose 75.6 percent last month, the highest rate since Moscow invaded Ukraine, even as trade with most major European markets and the US fell.
Meanwhile, imports fell 4.5 percent last month, a smaller decline than April’s 7.9 percent contraction, but better than the 8 percent estimate.
The data are the latest to highlight weaknesses in the world’s No. 2 economy, with manufacturing activity shrinking last month for the second successive month.
The figures were “yet another disappointing data which will raise growth concerns and intensify expectations of more policy support,” Australia and New Zealand Banking Group Ltd head of Asia research Khoon Goh (吳昆) said.
The property sector, which along with construction accounts for about one-quarter of China’s GDP, experienced its “worst-ever slump” last year, Beijing-based economic consultancy Gavekal-Dragonomics (龍洲經訊) said.
To revive a struggling industry, the government has pivoted away from its crackdown on debt toward a more conciliatory approach since November last year, with targeted support measures for the most financially sound developers.
Reports yesterday said that authorities have asked the country’s biggest banks to lower their deposit rates in a bid to boost the economy.
Analysts said that such a move could indicate that the People’s Bank of China was considering an interest rate cut as soon as this month.
Nomura Holdings Inc chief China economist Ting Lu (陸挺) said in a note this week that analysts expected “more easing and stimulus measures.”
“Amid the deteriorating property sector, its potentially devastating impact on government finance and the rising risk of double-dip, we do not expect Beijing to sit idle,” Lu wrote.
Last month’s trade data suggests “subdued global demand for Chinese goods and supports our view that the robust export figures of the previous couple of months reflected distortions to the customs data rather than a turnaround in foreign demand,” Capital Economics Ltd analysts wrote in a note yesterday.
“We think exports will fall further before bottoming out later this year,” they said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure