ALBAWABA – China exports dropped unexpectedly in October, official data showed Tuesday, as the world’s second-largest economy deals with faltering global demand and sluggish domestic recovery.
China exports, a key driver of growth, sank 6.4 percent year-on-year in October, according to the General Administration of Customs, as reported by Agence France-Presse (AFP).
The reading was much worse than the 3.5 percent drop forecast in a Bloomberg survey of economists and slightly heavier than September, according to AFP.
Apart from a brief rebound in March and April, exports have been in constant decline since last October.
Overall, China recorded moderate growth in the third quarter as Beijing looks to achieve its official goal of "around five percent" expansion for 2023 – one of its lowest targets in years.
The rise in imports, by 3 percent, could be a signal that domestic demand in China is recovering from months of weakness after the government issued a series of stimuli to boost the domestic market.
China slipped into deflation in July for the first time since 2021, AFP reported, but it bounced back modestly in August, though analysts warned a relapse in the coming months was still possible.
China's PMI shrinking indicates a decline in domestic and overseas demand, which is consistent with lower China exports - Shutterstock
Shrinking China exports undermine the prospects of recovery, as October’s figures trumped the 3.3 percent fall expected in a Reuters poll and exceeded September’s whopping 6.2 percent decline.
China’s yuan and stocks fell after the data was released, reinforcing the markets' continued concerns about a fragile and uneven Chinese recovery.
The official purchasing managers' index last week showed both new export and import orders shrank for an eighth consecutive month in October.
Trade with China's major peers continued to contract, with exports to Southeast Asia, its largest trade partner, down 15.1 percent.
Exports to Australia, however, were the exception amid improving relations between Beijing and Canberra, rising 5.9 percent in October, as imports climbed 12.0 percent, Reuters reported.
China's higher imports narrowed the overall trade surplus to $56.53 billion in October, from $77.71 billion in September, missing a forecast of $82.00 billion
Beijing has sought to boost business activity in a country grappling with a major property crisis and weaker consumption since officials abolished their strict zero-Covid policy at the end of last year.
