China’s exports, imports fall in August as weak global demand keeps its economy under pressure

China's exports and imports both fell in August from a year earlier, reflecting tepid global demand that is adding to pressures on its slowing economy

Hong Kong: China’s exports and imports both fell in August from a year earlier, reflecting tepid global demand that is adding to pressures on its slowing economy.

Customs data released on Thursday showed exports for August slumped 8.8 per cent to USD 284.87 billion in the fourth straight month of decline. Imports slid 7.3 per cent to USD 216.51 billion.

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The total trade surplus fell to USD 68.36 billion from USD 80.6 billion in July.

Chinese leaders have in rolled out various policy measures to shore up the economy after the country’s rebound from the COVID-19 pandemic fizzled earlier than expected.

The central bank has eased borrowing rules and and cut mortgage rates for first-time home buyers while providing some tax relief measures for small businesses.

So far, the authorities have avoided large-scale stimulus spending or broader tax cuts.

Demand for Chinese exports weakened after the Federal Reserve and central banks in Europe and Asia began raising interest rates last year to cool inflation that was at multi-decade highs.

Economists say much of the impact of those rate increases has yet to filter through major Western economies, where consumer spending has remained relatively strong.

“Looking ahead, we expect exports to decline over the coming months before bottoming out toward the end of the year,” Julian Evans-Pritchard of Capital Economics said in a report.

“Most measures of export orders point to a more substantial pullback in foreign demand than has so far been reflected in the customs data,” he said.
China’s trade has been gradually declining for the past two years, though August’s drops in export and imports were less severe than in July, when exports fell 14.5 per cent from a year earlier while imports were 12.4 per cent lower.

Politically sensitive exports to the US fell 17.4 per cent from a year earlier to USD 45 billion, the customs data showed, while imports of US goods slid 4.9 per cent to nearly USD 12 billion.

China’s imports from Russia, mostly oil and gas, increased 13.3 per cent from a year earlier to USD 11.52 billion.

Chinese purchases of Russian energy have swelled, helping to offset revenue lost to Western sanctions imposed to punish the Kremlin for its invasion of Ukraine.

Exports to the European Union tumbled 10.5 per cent from the same time last year to USD 41.3 billion, while imports of European goods declined 2.5 per cent to USD 24.56 billion.