China’s export growth slowed more than expected in August as global demand continued to weaken and domestic manufacturing slowed, while imports were almost flat.
(Bloomberg) — China’s export growth slowed more than expected in August as global demand continued to weaken and domestic manufacturing slowed, while imports were almost flat.
Exports in US dollar terms expanded 7.1% last month from a year earlier to $314.9 billion, the General Administration of Customs said in a statement Wednesday. That missed the median estimate for a 13% rise in a Bloomberg survey of economists, and was the slowest since April.
Imports grew 0.3%, slowing from an increase of 2.3% in July. That was lower than the median forecast of 1.1%. The trade surplus narrowed to $79.4 billion last month, according to the data.
The data comes after factory activity in Europe and the rest of Asia slumped in recent months, reflecting slowing global economic momentum. That’s in part driven by dwindling consumer demand due to the surging prices of energy and other consumer goods and services. Meanwhile, Covid outbreaks worsened within China during August, resulting in lockdown in places like Yiwu in the eastern province of Zhejiang, a major manufacturing and exporting hub.
What Bloomberg Economics Says…
August’s sharper-than-expected slowdown in China’s export growth is another sign that the recovery is losing steam — and needs more policy support. We expect trade to remain under pressure for the rest of the year, due to base effects and a weakening global outlook.
David Qu, China economist
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Domestic factory output contracted for a second month in a row in August, according to official data, due to power cuts, weak property demand and worsening Covid outbreaks and restrictions. Declining global demand bodes ill for China’s exports, which was an important driver for the economy since the pandemic and contributed to about a fifth of gross domestic product growth last year.
There are signs that export price inflation is beginning to play a bigger role than volume growth in driving exports — about half of the headline export growth in July was due to the price effect, according an estimate by Macquarie Group Ltd.
A slowdown in exports would add further strain on the economy already suffering from a stop-start Covid reopening and a yearlong property market slump. It would also result in more pressure on the yuan, which is sliding to a two-year low as the economic recovery falters and the central bank eases monetary policy to aid growth.
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