BEIJING (Business Time) -
China’s export growth slowed more than expected in August as global demand weakened and Covid lockdowns disrupted manufacturing production. Imports barely grew as domestic demand continued to struggle.
Exports in U.S. dollar terms expanded 7.1 per cent last month from a year earlier to $314.9 billion, the General Administration of Customs said in a statement Wednesday (Sep 7). That missed the median estimate for a 13 per cent rise in a Bloomberg survey of economists and was the slowest since April.
Imports grew 0.3 per cent, slowing from an increase of 2.3 per cent in July and lower than the median forecast of 1.1 per cent. The trade surplus narrowed to $79.4 billion last month, according to the data.
The data comes after factory activity in Europe and the rest of Asia slumped in recent months, reflecting slowing global economic momentum. That’s in part driven by dwindling consumer demand due to the surging prices of energy and other consumer goods and services. Meanwhile, Covid outbreaks worsened within China during August, resulting in lockdown in places like Yiwu in the eastern province of Zhejiang, a major manufacturing and exporting hub.
“China’s export growth is retreating to its more normal levels after 2 years of exceptional growth,” said Lu Ting, chief China economist at Nomura Holdings. The trade surplus is elevated “due to low imports, pointing to China’s weak domestic demand”, he said after the data was released.
Weaker exports will weigh on the currency, which is close to breaching 7 to the dollar. The People’s Bank of China has taken several steps recently to slow the yuan’s depreciation, and set its reference rate for the currency at the strongest bias on record on Wednesday.