BEIJING: China’s export growth weakened in August, as surging inflation crippled overseas demand and fresh Covid curbs and heat waves disrupted production, reviving downside risks for the economy.
Exports rose 7.1% in August from a year earlier, slowing from an 18% gain in July, official customs data showed on Wednesday. The reading missed analysts’ expectations for a 12.8% increase.
Outbound shipments outperformed other economic drivers in 2022 but now face growing challenges as external demand wanes.
China’s slower growth in part is due to unflattering comparisons to strong exports last year, but also worsened by more Covid restrictions as infections spiked and heat waves disrupted factory output in southwestern areas.
Eastern export hub Yiwu imposed a three-day lockdown in early August to contain a Covid outbreak, disrupting local shipments and delivery of Christmas goods amid the peak season.
Imports were again tepid, rising only 0.3% in August from 2.3% in the month prior, the customs data showed, and well below a forecast for a 1.1% rise.
The weak domestic demand, dampened by the worst heat waves in decades, a property crisis and sluggish consumption, crippled imports.
Global commodity prices continued to fall in August, though at a slower pace.
This left a narrower trade surplus of US$79.39 billion, compared with a US$101.26 billion surplus in July, which was a record for a single-month goods trade balance for any country in history.
Analysts at Goldman Sachs expect China’s elevated levels of trade surpluses to sustain over the next few years but warned key risks are geopolitical tensions and substantially higher commodity prices over the medium-term.
Assistant commerce minister Li Fei said on Monday China’s foreign trade faces unfavourable factors, including weakening external demand.
The central bank on Monday said it would cut the amount of foreign exchange reserves financial institutions must hold, a move aimed at slowing the yuan’s recent depreciation.
Source: https://www.freemalaysiatoday.com/category/business/2022/09/07/chinas-august-trade-growth-loses-steam-on-softer-demand/