China’s exports fell for the first time since 2020

China’s exports fell for the first time since 2020

China’s exports fell for the first time since 2020

China’s exports fell in October for the first time since the early stages of the Covid-19 pandemic, showing mounting pressure on an economy still gripped by strict anti-virus measures.

In dollar terms, exports fell 0.3 percent from the previous month, official data showed Monday, compared with economists’ forecasts for a 4.5 percent increase in September and a 5.7 percent increase. The last time that indicator decreased was in May 2020.

China’s trade has supported its economy throughout the pandemic. Its exports increased in 2020 and 2021 as global markets shifted to buying goods rather than services.

But the latest data highlight country data exposure to global slowdown as other major economies raise interest rates to cope with higher inflation. Unlike China, most countries have largely lifted Covid restrictions.

“Consumer preferences abroad have changed, and the decline in commodity consumption is undermining China’s export demand,” said Hao Zhu, chief economist at Guotai Junan International Investment Bank.

As policy tightens, “the risk of an economic downturn abroad will increase, significantly impacting global demand,” he added.

Weaker-than-expected trade data adds to domestic pressures China’s economy as policymakers struggle to contain the nationwide decline in ownership and the mitigating impact of its strict zero-Covid policy. The strategy aims to quickly eliminate all coronavirus outbreaks through mass testing, lockdowns and quarantine for close contacts of positive cases.

China’s economy in the last three months of September grew by only 3.9 percent year-on-year, below the 5.5 percent target, which was already the lowest in three decades. Lockdowns in major cities to contain smaller outbreaks weighed on consumer demand, with retail sales rising just 2.5 percent in September.

Stocks in Hong Kong and mainland China have has been spinning for the past week following news that the zero covid policy will be eased. But Beijing dismissed the rumors over the weekend. And at the Communist Party Congress last month, zero Covid was praised and no timetable for easing the rules was suggested.

Imports also fell last month for the first time in more than two years, down 0.7 percent in annual dollar terms.

Zichun Huang, an economist at Capital Economics, noted that a third of China’s imports were in turn used for its exports. “We expect further weakness,” he said.

China kicked off its fifth International Import Expo in Shanghai on Friday, a major convention hosting thousands of foreign and domestic companies. President Xi Jinping emphasized in a video speech that China remains committed to opening up to the outside world.

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