China’s exports fell in October, missing expectations for growth
A cargo ship carrying containers is seen near Yantian Port in Shenzhen, following the outbreak of the novel coronavirus disease (COVID-19), in China’s Guangdong province, May 17, 2020.
Martin Pollard |: Reuters:
BEIJING – China’s exports fell unexpectedly in October as the value of goods sold to the US and the EU fell, according to Chinese customs data released on Monday.
China’s exports fell 0.3% in US dollar terms in October from a year earlier, missing Reuters expectations for a 4.3% rise.
The decline was a sharp drop from September’s 5.7% annual increase and the first decline since May 2020, according to data from Refinitiv Eikon.
Imports fell 0.7% in US dollar terms in October, also missing expectations for a modest 0.1% increase and compared to September’s 0.3% increase.
China’s exports to the U.S. fell 12.6% in October from a year earlier, the third straight month of declines, according to CNBC’s calculations of U.S. customs data.
The US is China’s largest trading partner on a per-country basis, the data show.
China’s exports to the European Union fell by 9% in October after increasing in September.
However, China’s exports to the Association of Southeast Asian Nations, the country’s largest trading partner by region, rose nearly 20% in October.
Global exports of household appliances from China fell by more than 20%, toys by about 18%, and shoes by about 11%.
The country’s car exports rose 60% to 352,000 units in October, the data showed.
Import of crude oil from China increased by 14% compared to last year, and coal by 8%. However, the import of natural gas was reduced by about 19%.
In addition to ongoing Covid surveillance, last month marked the twice-a-decade Congress of the Communist Party of China, during which President Xi Jinping strengthened his power.
The prospects of an economic recession in the EU and the US have increased over the past few months. Many major US technology companies have recently announced layoffs and other cost-cutting measures.
“High inflation is eroding the purchasing power of overseas consumers,” said Hao Zhu, chief economist at Guotai Junan International. “As monetary policy moves deeper into restrictive territory, the risk of an economic downturn abroad will increase, significantly impacting global demand. So China’s exports may come under pressure.”
The decline in China’s exports came despite a strengthening US dollar.
Aggressive rate hikes by the US Federal Reserve have strengthened the dollar against other currencies. According to Refinitiv Eikon data, the yuan weakened by almost 3% against the US dollar in October.
Yuan-denominated exports rose 7% and imports rose 6.8%, customs data released Monday showed.
In another sign of faltering global demand, South Korea’s exports fell for the first time in two years in October, down 5.7% year-on-year, Macquarie’s chief China economist Larry Hu said in a note on Sunday. He said that the growth of Korean exports is a leading indicator for the Asian supply chain.
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