China’s exports significantly beat expectations in August, as the country’s trade surplus narrowed as foreign demand flattened and a new wave of Covid-19 restrictions in the country disrupted production and production. logistics.
Exports rose 7.1% last month from the same period a year earlier, well below consensus expectations of a 13% increase and down from 18% growth in July, according to official customs data released on Wednesday. The fall marked the first slowdown since April.
The country’s trade balance narrowed to a surplus of $79.4 billion, against market expectations of $92.7 billion, after hitting a record high of $101.3 billion in July.
The trade had been a rare bright spot for China’s economy, which has been hammered by a liquidity crunch in the property sector and widespread shutdowns under President Xi Jinping’s zero Covid strategy. Analysts said this month’s slowdown represented the beginning of the end of the export boom that provided a lifeline to the world’s second-largest economy after the early stages of the pandemic in 2020.
“The softness in exports came earlier than expected, as recent shipment data suggests that demand from the US and EU has already slowed as shipment prices have fallen significantly,” Zhou Hao said. , chief economist at Guotai Junan International, a Hong Kong-based brokerage firm. .
The downbeat data follows a slump in industrial production in Europe and elsewhere in Asia, as high inflation and soaring energy prices weigh on consumer demand and most stock markets in the region fall on Wednesday.
Output in the world’s second-largest economy was rattled by a fresh round of city lockdowns in August, which hurt manufacturing and export hubs such as Yiwu in southeastern Zhejiang province.
The country has also had to deal with droughts and heat waves, causing power shortages that have forced several provinces and cities to suspend or restrict power supplies to factories.
Imports also missed estimates, rising just 0.3% year-on-year in August, below expectations of 1.1% growth.
“Price effects will continue to cloud the picture for trade performance – in real terms, Chinese import growth has turned negative since the end of the first quarter, suggesting that demand is still facing headwinds” , Zhou added.
Analysts have warned that Chinese exports – which boomed at the start of the pandemic as demand for many electronics surged – could decline further as much of the world begins to treat the virus as endemic and the prospect of a global recession is looming.
“Now that most economies have reopened, consumption patterns are shifting from durable goods to services,” analysts from research group Capital Economics wrote in a note. “Going forward, high inflation and tighter financial conditions elsewhere will also increasingly dampen foreign demand for Chinese goods.”