HomeBusinessChina's trade slump narrows...

China’s trade slump narrows as stabilisation signs emerge

BEIJING, Sept 7 (Reuters) – China’s exports and imports extended declines in August as the twin pressures of sagging overseas demand and weak consumer spending at home squeezed businesses in the world’s second-largest economy, although the falls were slower than expected.

While the trade numbers follow a run of other indicators showing a possible stabilisation in China’s downturn, they remain far short of the growth economists anticipated earlier this year when the government abandoned its strict COVID curbs.

Exports dropped 8.8% in August year-on-year, customs data showed on Thursday, beating a forecast of 9.2% in a Reuters poll and off a 14.5% drop in July. Meanwhile, imports contracted 7.3%, slower than an expected 9.0% decline and last month’s 12.4% fall.

China’s economy is at risk of missing Beijing’s annual growth target of about 5% as officials wrestle with a worsening property slump, weak consumer spending and tumbling credit growth, leading analysts to downgrade forecasts for the year.

Reuters Graphics

“The trade data is marginally better, but I don’t think we should be reading too much into that: trade is still contracting,” said Frederic Neumann, chief Asia economist at HSBC.

“There is a bit of a sign here of stabilisation, but I think there’s still a long way to go,” he added.

Beijing has announced a series of measures in recent months to shore up growth, with the easing of some borrowing rules last week by the central bank and the top financial regulator to aid homebuyers.

But analysts warn the steps may have little impact with a labour market recovery slowing and household income expectations uncertain.

Containers are seen at the Yangshan Deep-Water Port in Shanghai, China October 19, 2020. REUTERS/Aly Song/File Photo Acquire Licensing Rights

“The figures suggest the headwinds remain, despite some marginal improvement,” said Zhou Hao, chief economist at Guotai Junan International. “Looking ahead, whether China’s trade growth has already hit the bottom will hinge on several factors, the most important of which is obviously domestic demand.”

Governments around the world are nervous about China’s economic slowdown with many exporting nations highly dependent on the country’s market for growth.

South Korean shipments to China, a leading indicator of the latter’s imports, dropped just a fifth last month, slowing from a decrease of 27.5% a month earlier, offering another nod to conditions stabilising in China.

Declines in trade with the United States, Southeast Asia and Australia also narrowed.

However, trade with Japan dropped sharply, with outbound shipments from China to its neighbour down 20% in August year-on-year, while imports worsened by 17%.

Policymakers in Tokyo fear China’s deepening economic woes could hit Japan’s fragile recovery, especially if Beijing fails to shore up demand with meaningful stimulus.

Crude oil shipments to China were 31% higher in August than the same period last year, and up 21% on July, while soybean imports in August also jumped 31% from a year ago, encouraged by cheap prices in Brazil.

While some analysts some saw signs of stabilisation in the data, investors were not so impressed with the yuan wallowing near a 10-month low and the Australian dollar, seen as a proxy for Chinese growth, turning weaker after the data.

China posted a trade surplus of $68.36 billion in August, compared with a forecast $73.80 billion and a July figure of $80.6 billion.

“Due to the low base at the end of last year, it’s very likely for exports to return to growth at the end of this year,” said Nie Wen, an economist at Hwabao Trust.

Reporting by Joe Cash, Ellen Zhang, Liangping Gao and Beijing Newsroom; Editing by Sam Holmes

Our Standards: The Thomson Reuters Trust Principles.

Acquire Licensing Rights, opens new tab

Joe Cash reports on China’s economic affairs, covering domestic fiscal and monetary policy, key economic indicators, trade relations, and China’s growing engagement with developing countries. Before joining Reuters, he worked on UK and EU trade policy across the Asia-Pacific region. Joe studied Chinese at the University of Oxford and is a Mandarin speaker.

Source link

Most Popular


Please enter your comment!
Please enter your name here

More from Author

Read Now

Does New CFIUS Data Show U.S. Constraints On Foreign Investment Intensifying?

Washington’s executive branch interagency Committee on Foreign Investment in the U.S., “CFIUS”, the entity that oversees the country’s national economic security screening of inbound foreign direct investment is required by statute to submit to Congress and publish an annual report cataloging decisions it took the preceding...

What’s Coming to Netflix in October 2023

Illustration by What’s on Netflix Welcome to your comprehensive look ahead at what will arrive on Netflix in October 2023. Below, we’ll run through all the currently planned new movies, series, and games headed to the service throughout the month.  As always, keep an eye on our removals...

The New York Film Festival opens with the industry in limbo

Comment on this storyCommentNEW YORK — The New York Film Festival got off to a stylish start Friday night with a party at Central Park’s famed Tavern on the Green — or as stylish as you can get when none of the striking actors in this...

Live updates from Week 5 of college football

No. 6 Penn State 10, Northwestern 10 Early turnovers were always apart of Northwestern’s upset formula against top-10 Penn State, but even the most optimistic Wildcat fans likely couldn’t imagine forcing a turnover on the very first play.  After fielding the opening kickoff on a triple hop, Penn...

YouTube Music rolls out auto-downloads for podcasts

Following the news that Google Podcasts is shutting down next year, YouTube Music now has the ability to auto-download podcasts. To enable, visit a show page and tap the new settings gear icon to “Save/d to library.” This slides up the “Turn on auto-downloads” button and will...

Apple Says iPhone 15 Pro’s Titanium Frame Does Not Contribute to Overheating Issue

Apple today said it plans to release an iOS 17 software update with a bug fix for the iPhone 15 Pro and iPhone 15 Pro Max overheating issue, and the company has since shared additional details about the matter with MacRumors. Importantly, Apple said the issue is...

Beyonce in Final Talks to Release ‘Renaissance’ Concert Film Through AMC Theatres Following Taylor Swift Deal (EXCLUSIVE)

Mason Poole A film based on Beyonce‘s smash hit Renaissance World Tour is in advanced talks to distribute directly to AMC Theatres, sources with knowledge of the project told Variety. Mega-agency CAA held preliminary talks with major studios and streamers two weeks ago, another source added, urging...

These are the top 4 Club stocks — and the bottom 4 — during the third quarter

September, historically the worst month of the year for stocks, once again brought pain to Wall Street, sending the market lower for the third quarter. A steep rise in Treasury yields and oil prices, combined with fears that the Federal Reserve would keep interest rates "higher...

Apple Says iPhone 15 Pro Overheating Due to iOS 17 Bug, Not Hardware Design

Widespread complaints about overheating of the new iPhone 15 Pro and Pro Max can be traced to several factors, including a software bug in iOS 17, Apple told CNET on Saturday. The company said the new phones' titanium frame and aluminum substructure aren't contributing to the issue, and that...